Samantha Subin of CNBC reports Wall Street sees ‘changing of the guard in AI’ as Intel, AMD shares soar while Nvidia lags: 

Since the launch of ChatGPT in late 2022 and the start of the generative AI craze, one name has dominated the infrastructure boom: Nvidia.

While the chipmaker — and the world’s most valuable company — continues to prosper and is expected to show revenue growth of 70% this fiscal year, Wall Street has moved elsewhere, piling into businesses that were hardly visible in the initial years of the artificial intelligence buildout.

This week offered the starkest illustration yet of what Mizuho analyst Jordan Klein said could be a “changing of the guard in AI.” Chipmakers Advanced Micro Devices and Intel notched gains of about 25%, while memory maker Micron jumped more than 37% and fiber-optic cable maker Corning climbed about 18%.

All four of those companies have more than doubled in value this year, with Intel leading the way, up well over 200%. Nvidia, meanwhile, is only slightly ahead of the Nasdaq in 2026, gaining 15% for the year, aided by an 8% rally this week.

In spreading the wealth to a wider swath of hardware companies, investors are clearly betting that the bull market in AI has long legs and that data centers are going to need a wider array of advanced components for years to come. Memory has been the biggest theme of late due to a global shortage that’s driven up prices and turned Micron, a 47-year-old company tucked in a sleepy corner of the semiconductor market, into one of the hottest trades over the past 12 months.

Micron blew past an $800 billion market capitalization for the first time this week, and the stock is now up over 750% in the past year. CEO Sanjay Mehrotra told CNBC in March that key customers are only getting “50% to two-thirds of their requirements” because of supply issues. 

The memory market is largely dominated by Micron, along with Korea-based Samsung and SK Hynix, which are also both in the midst of historic rallies.

“That is what happens when a market quickly enters a material shortage condition and pricing surges higher” while expenses “rise only modestly,” Mizuho’s Klein wrote in a note to clients early in the week. “You make a lot of money being overweight historic memory upturns when new capacity cannot be added fast enough. That simple.”

Agents drive ‘tremendous demand’

Beyond memory is insatiable demand for central processing units (CPUs), which underpin everyday computers and smartphones. They had mostly become an afterthought as model developers like OpenAI and Anthropic and cloud giants Google, Microsoft and Amazon were gobbling up Nvidia’s GPUs.

Now CPUs are back in the spotlight as momentum shifts from chatbots to AI agents. Bank of America estimates the data center CPU market could more than double from $27 billion in 2025 to $60 billion in 2030.

AMD’s quarterly results this week underscored the emerging trend, as earnings, revenue and guidance sailed past estimates on strong data center growth. The company has long led the CPU charge, and CEO Lisa Su said on the earnings call that AMD now expects 35% growth over the next three to five years in the server CPU market, up from a forecast of 18% growth that the company provided in November.

“Agents are really driving tremendous demand in the overall AI adoption cycle, and we’re very excited to be in the middle of it,” Su told CNBC’s “Squawk on the Street” on Wednesday, following the company’s earnings report.

Analysts at Goldman Sachs and Bernstein upgraded the stock to buy ratings, citing CPU tailwinds. And JPMorgan Chase analysts said the report “crystallizes the structural inflection underway across both server CPU and [datacenter] accelerator growth trajectories.”

Intel, which for many years towered over AMD in the CPU market before missing out on numerous major transitions, most notably AI, is in the midst of a revival sparked by a major investment from the U.S. government last year.

Intel’s stock had its best month on record in April, more than doubling, and has continued notching massive gains, rising 33% in the early days of May. The shares surged 13% on Tuesday following a Bloomberg report that Apple is in talks with Intel and Samsung to produce the main processors for its U.S. devices. They climbed another 14% on Friday after the Wall Street Journal reported that Intel and Apple have come to an agreement for the chipmaker to manufacture some processors for Apple devices.

Representatives from Intel and Apple declined to comment.

Elsewhere in the new AI stack, some companies are directly benefiting from partnerships with Nvidia.

Glass maker Corning, which celebrated its 175th anniversary this week, signed a massive deal with Nvidia on Wednesday that involves the development of three new U.S. factories dedicated entirely to optical technologies for the chip giant.

The deal gives Nvidia the right to invest up to $3.2 billion in Corning, and is likely a major step in Nvidia’s move away from copper cables and towards fiber-optic cables as it builds out its rack-scale systems. Earlier this year, Corning inked a $6 billion deal with Meta through 2030 to provide fiber-optic cables in the social media company’s AI data centers. 

“We’re going to scale up optical at a scale that, quite frankly, no optical companies have ever enjoyed,” Nvidia CEO Jensen Huang told CNBC’s Jim Cramer on Thursday. He said the economy is going through the “single largest infrastructure buildout in human history.” 

Corning’s recent boom on Wall Street pushed its stock to a record in February, when it finally passed its prior high from the dot-com era in 2000. It’s continued to soar in the months since.

Analysts are seeing plenty of other comparisons to the internet boom of the late 1990s, which preceded an extended market bust.

Jonathan Krinksy, an analyst at BTIG, said in a recent note that the magnitude of the markup in the semiconductor space resembles 1999. He warned of a 25% to 30% correction for the PHLX Semiconductor Index, a significant benchmark for the sector, which is up 66% so far this year.

“We have written ad nauseam about how extreme the move in semis has been — in many cases not seen since the dot-com bubble,” he said. “In some ways, however, this move is actually more extreme.”

Last week, I discussed how stocks knocked it out of the park in April, led by red-hot chip stocks.

This week, semis are melting up again led by Micron, AMD, Intel and Qualcomm:

The melt-up in some chip stocks is staggering, even more so than 1999-2000.

They're way overbought but continue to melt up in a parabolic fashion.

For example, Micron shares are up 38% this week, 84% over the past month and 777% over the past year.

So what? Sandisk shares are up 4,162% over the past year, trouncing every other stock. 

 Gamma hedging and one-day options are undoubtedly fuelling these explosive moves but it's more than this; clearly, CTAs/ large quant funds are running the show, increasing their positions in chip stocks with every new high.  

How much higher can chip stocks fly? Nobody has a clue but Sandisk's 4,000%+ return over this past year after it IPOed sends a chill down the spine of short sellers.

Things are way overheated but this May melt-up can continue. 

Still, semis are due for a pause and pullback so chase them at your own risk here.

Below, the CNBC Investment Committee debate whether AI stocks can carry the market and how you should position your portfolio in this environment.

And Paul Tudor Jones, Tudor Investment Corporation founder and CIO and Robin Hood Foundation founder and board member, joins 'Squawk Box' to discuss the promise and perils of AI, future of AI regulation, state of the AI boom, latest market trends, the Fed's interest rate outlook, NY's wealth tax proposal, and more.

Below, EPI senior economist Elise Gould offers her insights on the jobs report released this morning, which showed 115,000 jobs added in April. Read the full thread here. 

Today’s jobs report came in stronger than expected as payrolls increased by 115,000 in April. As a result, average monthly growth the last three months was 48,000 jobs. The unemployment rate held steady as both labor force participation and the employment level dropped slightly.
#NumbersDay #EconSKy

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 7:37 AM

Overall job gains were 115k in April. Job gains were strongest in health care. transportation and warehousing, and retail trade. Losses continue in information, financial activities, and the federal government.
#NumbersDay #EconSky

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 7:50 AM

The federal workforce continues to suffer down another 9,000 jobs in April. Federal employment has shrunk an alarming 345k jobs since Jan 2025. The vital services federal employees provide cannot be done without these essential workers.

Note: Federal employees on furlough are counted as employed.

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 7:56 AM

After finally seeing some reversal of grave losses in recent months, manufacturing employment ticked down again in April. Since January 2025 when Trump took office, the manufacturing sector has lost 77,000 jobs.

#EconSky #NumbersDay

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 7:59 AM

Nominal wage growth continued to slow in April. Over the last three months, wages have growth only 2.8% (annualized). The one-month change was even slower (1.9%).

As inflation rises, real wages fall as workers and their families find it increasingly difficult to make ends meet.
#EconSky #NumbersDay

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 8:12 AM

Overall unemployment masks important differences by race and ethnicity. The Black unemployment rate ticked up slightly to 7.3% in April. Even given volatility due to smaller sample sizes, it’s clear that the Black unemployment rate remains elevated, particularly much higher than any other group.

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 8:33 AM

With a depressed hires rate, I’ve been concerned about young people having opportunities to break into the labor market. The unemployment rate of young workers—16-24 years old—ticked up again in April, once again hitting 9.5%
#EconSky #NumbersDay

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— Elise Gould (@elisegould.bsky.social) May 8, 2026 at 8:37 AM

Bill Curry and James Bradsaw of the Globe and Mail report pension funds should invest more in Canada, Senate finance committee chair says:

The federal government should force the investment arms of the Canada Pension Plan and public-sector pensions to invest additional funds in this country rather than launching a sovereign wealth fund, says the Conservative chair of the Senate finance committee.

In an interview with The Globe and Mail Wednesday, Senator Claude Carignan said the model – known as a dual mandate – has worked well in Quebec with the Caisse de dépôt et placement du Québec.

“My position is that I think that the pension funds need to invest more in Canada,” the Quebec-based senator said.

While the federal government has frequently said it wants to help create conditions that encourage such funds to invest more domestically, Mr. Carignan said urging voluntary action hasn’t worked and legislative changes should be considered. 

“We could change their mandate and put a note that they have to invest more in the Canadian economy, like we have with Caisse de dépôt,” he said. “The other pension plans don’t have this objective, but I think that they have to be more involved in our economies.”

Mr. Carignan said a dual mandate would eliminate the need for the $25-billion Canada Strong Fund that Prime Minister Mark Carney announced last month tied to the government’s spring economic update.

The Conservative senator said he was expressing a personal view and acknowledged his comments place him at odds with his own party.

The CPP is jointly managed by Ottawa and the provinces, except Quebec. Changing the CPP investment rules would require the support of Ottawa and at least two-thirds of participating provinces, representing two-thirds of the population of those provinces.

The Public Sector Pension Investment Board (PSP Investments) invest funds for the pension plans of the public service, the Canadian Armed Forces, the Royal Canadian Mounted Police and the Reserve Force.

The CPPIB and PSP Investments have virtually identical mandates to invest assets with a view to achieving maximum rates of returns without undue risk. Neither fund is subject to minimum amounts with respect to domestic investments.

The CPPIB held net assets worth $780.7-billion as of Dec. 31, 2025, while PSP Investments held $299.7-billion as of March 31, 2025.

Under pressure to put more money to work in Canada, the chief executives of Canada’s largest pension funds have argued that the plans have thrived on an independent governance model that keeps them free from political meddling.

Some pension-sector experts have suggested that the dual mandate that governs the Caisse has been a drag on its returns over the past decade. But comparisons with peers are hard to make given the different mix of clients the funds serve.

Provincial law in Quebec requires the Caisse to pursue “optimal returns” for its six million depositors “while contributing to Quebec’s economic development.” The fund now manages $517-billion in assets, and its former CEO, Michael Sabia, is Clerk of the Privy Council in Mr. Carney’s government. Its Quebec investments include infrastructure projects such as Montreal’s REM light-rail line.

Conservative MPs stressed the need for CPP independence in an exchange last month with Canada Pension Plan Investment Board senior managing director Michel Leduc.

During a recent finance committee meeting in the House of Commons, Conservative MP Pat Kelly criticized calls for the CPP to have a domestic investment mandate.

“We hear voices, from time to time, saying things like, ‘Why doesn’t the CPPIB invest in Canada?’ ‘Shouldn’t they invest more in Canada?’ or more chillingly: ‘Should they be compelled to invest more in Canada?’ ” he said, before asking Mr. Leduc to comment on the importance of the fund’s independence.

Mr. Leduc responded by saying that the CPPIB does invest considerably in Canada, which he pegged at more than $115-billion.

“The point about independence is critical on multiple fronts, including our ability to access global markets,” he said. “If we were seen to have different non-commercial objectives – perhaps national-interest objectives – it would make our life a lot more difficult regarding accessing prized assets around the world.”

Mr. Leduc told The Globe Wednesday that the CPPIB is one of the best performing pension funds in the world and Canada should not be adding barriers.

“We have heard many voices about this in recent years and while everyone is entitled to their opinions, that respectfully doesn’t extend to their own facts,” he said.

In April, Ontario Municipal Employees Retirement System was the first major Canadian pension fund to set a target to boost its exposure to Canada. CEO Blake Hutcheson said OMERS plans to add at least $10-billion of new investment in Canada over five years, which would increase the part of its portfolio in Canadian assets to 25 per cent from 18 per cent.

John Fragos, a spokesperson for Finance Minister François-Philippe Champagne, said the OMERS move shows the government’s “carrot” approach is working.

“We don’t need a stick,” he said. 

Alright, let me cover this since it's starting to really irritate me how many articles are coming out stating an opinion that Canada's large pension funds should invest more in Canada, and adopt a dual mandate like La Caisse.

With all due respect to Senator Claude Carignan (featured above), he doesn't know what he's talking about and I suspect I know who put him up to this (two fellas in Montreal).

Canada's large pension funds already invest billions in Canada across public and private assets and if the Carney Liberals start privatizing airports and other assets, they'll invest more.

They don't need or want a dual mandate, they want to have the freedom to invest in the best assets that meet their long-dated liabilities. 

We don't need to transform our pension funds into sovereign wealth funds and we don't need politicians telling our pension funds where to invest.

I have a serious problem with all these articles, people need to remind politicians that pension fund assets don't come from taxes, they come from members who contribute a percentage of their earnings.

The minute politicians insert themselves into the equation, it's game over, our pension funds will not be managed in an optimal sense.

Alright, not going to expand on this topic, if there are opportunities to invest in infrastructure assets in Canada, great, if not, leave our pension funds alone.

Below, Prime Minister Mark Carney has called Canada's pension funds "among the world's largest and most sophisticated investors." How large are they? By the end of 2024, they managed assets totalling nearly two and a half trillion dollars. 

But a lot of that money isn't being invested in Canada. As the government tries to boost the economy through nation-building projects, should Canadian pension funds be investing more right here at home? And what could we do to make that happen? 

TVO today discusses with Matthew Mendelsohn, the CEO of Social Capital Partners; and Keith Ambachtsheer, the co-founder of KPA Advisory Services and director emeritus of the International Centre for Pension Management at the University of Toronto.

Key takeaways:

• The unemployment rates for young college graduates and young noncollege workers have risen slightly faster than the overall unemployment rate.
• But the rise in young college graduate unemployment in particular was mostly due to higher labor force participation: The employment-to-population ratio for young college graduates has held steady since 2024.
• Certain demographic groups, such as Black and Hispanic workers, face higher unemployment and lower hourly wages, even for young people with limited work experience.
• In the long run, the college degree is losing its edge: Unemployment for young college graduates has risen in historical terms, and the college wage premium has been flat or falling in recent years.

Over the last couple of years, the overall labor market has slowly weakened—with many arguing that the weakening is most pronounced for young college graduates (whom we define as young workers ages 22–27 with only a college degree).1 The evidence is actually pretty mixed—by some measures the young college graduate labor market is notably weaker, but their outcomes are largely no worse than those of noncollege young people or the labor market writ large.

In this first blog post of our series on young college graduates, we examine the labor market the college graduates of the Class of 2026 are entering. We look at unemployment rates and employment-to-population (EPOP) ratios for young workers with and without a college degree and examine wages for young college graduates by demographic characteristics. We also explore longer-term trends in unemployment driven by rising educational attainment, as well as changes in the college wage premium—the pay advantage college graduates earn over their high school graduate peers. In the next post, we will analyze trends in the industries and occupations young college graduates tend to work in, and take a closer look at the tech sector and any fingerprints of AI on labor market outcomes.

Unemployment on the rise for young college graduates—but mostly because of higher labor force participation

Over the last couple of years, the labor market has shown some signs of weakening, though some often reported measures are overstating it. For example, payroll employment growth has slowed significantly, but this is largely driven by much slower population growth over the past year and a half as net immigration has collapsed. The unemployment rate has slowly increased, though the share of the prime-age population—those 25 to 54 years old—with a job has remained high. Of most concern is the hires rate—the number of hires as a share of total employment—which has been steadily falling over the last three years. The hires rate is now at the same levels seen in 2013 and 2014, a period during the prolonged recovery from the Great Recession that saw unemployment rates 3.0 percentage points higher than they are today. Focusing just on unemployment rates, the softening of the overall labor market appears to be hitting young college graduates more acutely.

Figure A shows the overall unemployment rate, as well as the unemployment rate for young college graduates and young workers without a four-year college degree. Since 2023, the overall unemployment rate has risen from 3.6% to 4.3%, a slow and measured increase of 0.7 percentage points. The unemployment rate for young college graduates has increased from a low of 4.0% in July 2023 to its recent high of 5.3% in March 2026, a faster increase of 1.3 percentage points. Young workers without a college degree also experienced a rise in unemployment, though their rise began a little later than the other groups. Their unemployment rate has risen by 1.2 percentage points since March 2024, up from 5.9% to 7.1% by March 2026.

Figure A

Some have pointed to this disproportionate rise in young college graduates’ unemployment rates as evidence that AI is beginning to substitute for the white-collar jobs young graduates typically enter. But this conclusion is premature for several reasons. First, while the rise in the unemployment rate in the most recent period is faster for college graduates than for all workers, the same is true for other young workers without a college degree (see Figure A). This suggests that there isn’t anything particularly damaging to young college graduates happening today, such as AI specifically destroying their labor market prospects.

Further, the increase in the unemployment rate for young college graduates over the last two years appears to be driven by an increase in labor force participation rather than a declining probability of having a job. The EPOP for young college grads has held steady over the last two years as the unemployment rate rose. Nearly all (98%) of the increase in the unemployment rate between 2024 and 2026 for young college graduates was driven by the increase in the labor force—meaning more young workers are entering the labor market in search of opportunities as opposed to giving up and leaving the labor force or never entering it at all. This would actually fit a historic pattern in which labor force participation rates tend to respond with a surprisingly long lag to labor market developments. The historically strong labor markets of the early 2020s likely are still pushing up the labor force participation rates of young college graduates today.

When we look at EPOPs since 2019, shown in Figure B, we see that young workers, college and noncollege alike, fall in line with the overall trend. Not surprisingly, given the industries and occupations hit the hardest, young noncollege workers fared the worst in the pandemic recession, but now are faring similarly to their college-educated counterparts. Prime-age EPOPs have remained the most resilient through this business cycle.

Figure B

Data from the Job Openings and Labor Turnover Survey provide useful insights into job openings, hires, quits, layoffs, and other separations, but they are not broken down by demographic, limiting our ability to analyze young workers. However, the depressed hires rate suggests that it is more difficult for new entrants to get a foothold in the labor market. The quits rate is down, signaling a reduction in the overall churn in the labor market as workers and employers sit tight through this period of economic uncertainty—likely related to chaotic policy decisions and implementation around tariffs, deportations, and the conflict with Iran. If the layoffs rate ticks up now, the unemployment rate is likely to spike quickly and could spell even more trouble for young people who tend to experience larger swings in unemployment with the business cycle.

Finally, there is no evidence that young college graduates are sheltering in school—i.e., going on to graduate school—to weather out the weakened labor market. In fact, enrollment rates among young college graduates have been falling slightly over the last couple of years, from 19.1% in 2024 and 18.8% in 2025 to 18.5% in 2026. Even though opportunities in the labor market are weaker, it’s perhaps not surprising that enrollment rates are on the decline. The Trump administration’s attacks on higher education have reduced available funding at colleges and the ending of student loan forgiveness and caps on borrowing make it increasingly difficult for students to make those educational investments.

Wages remain unequal across demographic groups

Real (inflation-adjusted) median wages of young college graduates rose slightly over the last year, up just 0.4% since 2025, consistent with the slowdown in wage growth for workers overall. Since 2019, young college graduate wages have grown 7.4% after adjusting for inflation.

Despite this positive wage growth, racial and gender wage gaps remain large even among young college graduates who are just starting their careers. Figure C shows that women are paid $4.18 less per hour than their male counterparts. At 85.9% of men’s pay, a young woman working full time with a college degree is paid $8,700 less over the year.

Young Asian American Pacific Islander (AAPI) college graduates are paid more than white, Hispanic, or Black workers. The demographic categories shown in Figure C are mutually exclusive: AAPI, white, and Black workers are non-Hispanic, while Hispanic workers can be of any race. Young white college graduates are paid $2.76 per hour less than their AAPI counterparts, while Black and Hispanic workers are paid $5.36 and $5.05 less, respectively. For a full-time worker, this translates into more than $10,000 in lower earnings over the year for Black and Hispanic workers. Not only are wages lower for these historically disadvantaged groups, but the unemployment rates of young Black college grads in particular are also higher. Therefore, their ability to secure employment at all—at any wage—is diminished.

Figure C Young college grads are competing against a wider labor force that is more educated 

As educational attainment has risen across the broader workforce, the advantage that young college graduates once enjoyed relative to the rest of the labor force in terms of lower unemployment and higher wages has steadily declined.

The young college graduate unemployment rate recently surpassed the overall unemployment rate, meaning a greater share of young college graduates are now out of work than workers writ large. The erosion of the unemployment advantage for young college grads, however, isn’t a sudden shift; as shown in Figure A, the trend has been building since 1979, when young college graduates had an unemployment rate of 4.0%, 1.9 percentage points below the national average. Over the following four decades, that advantage eroded. By February 2020, young college graduates had an unemployment rate of 3.8%, 0.2 percentage points above the overall rate, a slow but complete reversal of the historic edge. In recent years, the historic trend has continued—now the young college graduate unemployment rate is a full 1.0 percentage point above the overall. And the young college graduate unemployment rate is at historically high absolute levels today, currently sitting higher than it was during the worst of the 1990 and 2001 recessions.

The shift is not explained by young college graduates faring worse relative to their noncollege peers, as that gap has held relatively stable at around 2.0 percentage points. Instead, as the educational attainment of the overall workforce increased, young college graduates became less advantaged compared to the overall labor force. Further, as a greater share of young adults now attend college and are likely from a wider range of socioeconomic backgrounds, a college degree for somebody in their early 20s today is likely a less reliable marker of general economic privilege than it used to be.

Figure D displays educational attainment over time for young workers and all workers. From 1980 to 2026, the share of the workforce with a bachelor’s degree increased from 12.5% to 26.1%, more than doubling as a share of total employment. The overall level of college attainment for young adults rose from 18.0% in 1979 to 31.6% in 2026. If we include those with bachelor’s and/or an advanced degree in the overall workforce, the increase in educational attainment is even more stark, rising from 18.4% to 41.9%.

Figure D

The democratization of college degrees carries some clear upsides for productivity and the overall health of the U.S. economy. A more diverse set of people have accessed higher education and benefited from the advantages of being a degree holder in recent decades. This rise in college attainment has obviously not been costless, as many of these degrees could only be obtained by taking on large amounts of student debt, which may well provide some constraints on labor market opportunities and options for young adults.

Young college graduates used to be more male, white, and likely to come from higher-income families—all characteristics rewarded (fairly or not) in labor markets. This growing diversity of college graduates may well mean that young grads are less likely to exit (or not enter) the labor force when job prospects are bad. In prior decades, it is possible that young college graduates were more likely to have resources to fall back on during periods of unemployment, and they clearly had less student loan debt. Now, with fewer fallback options and greater debt levels, the cost of being jobless may weigh more heavily on this group, leading people to continue actively searching for work instead of staying out of the labor force even when jobs are scarce, driving the unemployment rate higher.

The long-term rise in educational attainment may also have helped squeeze the wage advantage college graduates hold over those with just a high school degree. Some of the same reasons discussed above—the college-educated population becoming more economically diverse and more workers attaining advanced degrees—may also have eroded the measured earnings edge that once came with just a bachelor’s degree.

A useful way to measure this is the college wage premium. The college wage premium is the percentage boost in wages associated with holding a college degree, after controlling for demographic factors like race, gender, age, and geography. As Figure E shows, this premium peaked around 2015 and has declined slowly since. Today, the overall college wage premium stands at 55.2%, roughly where it was in the late 1990s. For younger workers ages 22–27, the premium is slightly lower, but follows the same pattern, also peaking around 2015 before flattening or trending downward.

Figure E

The labor market is weakening and young workers’ prospects seem worse-off than they did just a couple of years ago. But young college graduates are facing a weakened labor market only slightly worse than that experienced by other workers. Their unemployment rate has risen faster, though similarly to noncollege young workers, while their employment-to-population ratio has remained generally strong. A depressed hires rate may make it even harder for these young workers to get a foothold in the labor market. Much of these short-term trends of higher and rising unemployment are the continuation of a decades-long trend of worsening outcomes as the overall population increases their educational attainment.

1. Throughout this brief, we define young college graduates as people between the ages of 22 and 27 with only a college degree. Unlike similar analyses of young workers, We do not exclude young college graduates that are currently enrolled in school, but the results here are robust either way. Unless otherwise noted, data for 2026 represent a 12-month average from April 2025 through March 2026 for the most up to date and reliable estimates, which removes seasonality and increases sample sizes. Analysis for smaller demographic groups uses a 36-month average to improve reliability.

The Canadian Press reports senior Quebec pension plan executives paid over $17M in remuneration and compensation:

The six most senior executives at the Caisse de dépôt et placement du Québec received a total of $17.15 million in total remuneration and other compensation payments in 2025.

This information is contained in the annual report of the “Quebecers’ nest egg,” published on Wednesday.

Chairman and CEO Charles Emond was awarded total remuneration of $5.1 million, compared with $4.9 million in 2024, representing an increase of approximately one per cent.

The remuneration and other terms of employment of the president and CEO are determined in accordance with parameters set by the government, following consultation with the board of directors.

The annual base salary of Michael Sabia’s successor was maintained at $550,000 in 2025.

Emond also received annual variable remuneration of $4.5 million, as well as $23,799 in pension plan contributions paid by La Caisse and other benefits totalling $54,906.

In a news release, La Caisse highlights that, “under Mr. Emond’s leadership, La Caisse delivered a return of 9.3 per cent over one year, with a level of risk tailored to depositors’ needs, thereby helping to maintain the excellent financial health of their schemes, even in an environment marked by uncertainty and profound changes.”

It adds that Emond “achieved his ambition of $100 billion in Quebec assets ahead of schedule” and “ensured, through his effective handling of complex situations that arose, the progress of key projects.”

She cites, in particular, the opening of the REM’s Deux-Montagnes branch, the start of planning work for TramCité, and Alto’s selection of the Cadence consortium to build the high-speed rail link between Quebec City and Toronto. 

Earlier today, La Caisse released its 2025 Annual Report: 

La Caisse today presented its Annual Report for the year ended December 31, 2025.

In addition to the financial results published on February 25, La Caisse presents an overview of its activities over the last year. The report includes:

• A presentation of La Caisse’s 48 depositors and their respective net assets as at December 31, 2025
• A detailed analysis of the overall return and different asset classes
• A risk management report
• An overview of La Caisse’s presence in Québec, where its assets reached the historic milestone of $100 billion, one year ahead of schedule, including highlights of La Caisse’s key achievements in supporting company growth and implementing structuring projects that contribute to economic development
• A section on governance, including reports from the Board of Directors and its committees covering audit, governance and ethics, investment and risk management, human resources management and compensation, as well as compliance activities
• The Sustainable Development Report, highlighting the new climate strategy adopted in 2025, which aims to accelerate the decarbonization of the real economy
• The financial report and consolidated financial statements
• The Report on Global Investment Performance Standards (GIPS) Compliance

The Annual Report Additional Information for the year ended December 31, 2025, was also published today.

But instead of focusing on that, Quebec's media is in an uproar that Charles Emond's total compensation reached $5.1 million and senior executive compensation surpassed $17 million:

Basically, all the articles are questioning why so much compensation was doled out when La Caisse underperformed its benchmark in 2025.

Alright, let me give you my quick thoughts here.

Whenever you look at compensation, look at 5-year returns rather than one-year because that's what it's primarily based on.

From table 21 on page 44 of the annual report:

As you can see, La Caisse underperformed its benchmark last year (9.3% vs 10.9%), mostly owing to the underperformance in private equity. 

I covered the results already in late February with the Head of Liquid Markets, Vincent Delisle (see my comment here).

Notice on the table above, over the last 5 years, La Caisse delivered an annualized return of 6.5% vs 6.2% for its benchmark.

And that's what primarily determines compensation.

Over a 10-year period, La Caisse delivered 7.2% annualized vs 6.9% for their benchmark.

The report on compensation starts on page 80 of the annual report and it goes into detail how they benchmark compensation relative to peers and determine it. 

Below, you can see the table outlining executive compensation on page 89:

I have no issue with the compensation that was doled out to Charles Emond and other senior executives (and that includes the $2.2 million severance doled out to Marc Cormier, former SVP, Fixed Income).

Again, look at asset class performance over the last 5 years and see how they get compensated relative to peers.

By the way, despite having the best performance among Maple Eight funds last year, Charles Emond and company received less total compensation than their peers in Toronto.

I'm not going to get into details here, you will have to wait this fall for the 2026 Pension Pulse Compensation Report, but suffice it to say that all the senior execs at Canada's Maple Eight received millions in compensation despite underperforming their benchmark last calendar and fiscal year. 

I've said it before, these people are paid extremely well and they all know it.

It's a great gig if you can land a senior exec job at one of Canada's large pension funds (politics plays a big role in landing these jobs).

Of course, they all have to deliver on long-term targets and in La Caisse's case, its dual mandate adds more challenges to the mix.

Moreover, Charles Emond is constantly in the spotlight; he has to appear in media to explain their activities and that adds extra pressure.

Don't get me wrong, he gets paid $5M total compensation to do this job, I'm not crying for him, I'm just stating that being the CEO of La Caisse isn't as glamorous or fun as you think.

Charles Emond and his senior execs are doing an outstanding job, not perfect, but they're delivering on key targets, including responsible investing.

Yes, they're all being paid extremely well, but that's the industry and it's a whole other discussion on whether or not Canada's senior pension fund managers are all getting paid way too much (according to my friends, their returns are "a joke" relative to the S&P 500 and "they're all overpaid").

Alright, let me wrap it up there, I'm bummed out the Habs lost to the Sabres in Game 1 but this series will be tougher than their first one Sabres have an excellent team).

Below, Canadians are demanding answers, but is the Bank of Canada listening? In this Public Accounts Committee hearing, officials are grilled over a court challenge to disclose senior executive compensation. While other central banks are open, why is Canada resisting? Watch as the committee pushes for transparency on taxpayer-funded salaries and the "personal information" defense. 

I personally find it ridiculous that the annual report of the Bank of Canada and all Canadian Crown corps don't have detailed compensation tables just like our pension funds disclose every year. 

Darcy Song of Top1000Funds takes a peek inside CPP Investments’ TPA engine:

It has been two decades since CPP Investments, Canada’s largest pension fund, first adopted the total portfolio approach, swapping out asset class labels for underlying drivers of performance as guidelines to portfolio construction.

Looking back on the revolution, the C$780 billion pension giant outlined in a recent paper the five pillars of TPA through which it achieves “disciplined flexibility”, allowing the fund to preserve “the ability to deliver exposures efficiently and adjust by choice rather than necessity”.

While CPP Investments made the first foray into TPA in 2006, it wasn’t until 2016 that the fund “institutionalised” the framework and set targeted market risk and desired exposures to economic drivers at a total fund level. It then separated the investments into an active portfolio and a highly liquid, passive “balancing portfolio”.

Central to CPP Investments’ TPA framework is the idea of “relative value” which determines how capital competes across its active strategies, the paper said. The process shifts the focus of evaluation of active risk away from headline IRRs to alpha excluding all costs but taking into consideration liquidity consumption and balance sheet capacity.   

This is especially useful for discerning the true value-add of private investments, which need to generate a rate of return above market beta and also compensate for the liquidity consumption and reduced optimality they cause in the portfolio.

“Traditional asset-class silos obscure these trade-offs. Allocation bands can implicitly treat private assets as inherently diversifying or alpha-generating,” said the paper, co-authored by Sally Shen, Derek Walker and Geoffrey Rubin from CPP Investments’ insight and total fund teams.

“Under the relative value framework, public and private investments compete explicitly on a common risk-adjusted basis, taking these considerations into account.”

The relative value framework applies to both new and existing investments as the decisions to resize or sell down assets carry the same importance to new deployments, the paper said.

“The relative value framework is integrated with exposure management as a continuous, repeatable process: capital allocation affects portfolio exposures; exposures are measured against strategic targets; deviations trigger rebalancing actions.”

The other four pillars around the relative value framework are factor exposures [See CPP evolves total portfolio approach], liquidity, leverage and currency.

Canadian funds have been big proponents of applying leverage in pension management and CPP Investments began using this tool over a decade ago. Its leverage is managed at a total fund level and assessed alongside the funding capacity and collateral demands and other balance sheet factors.

The paper emphasised that leverage is not used as a tool to scale risk and boost return but as a tool to support diversification. To meet CPP Investments’ return target, an unlevered portfolio is likely to be overexposed to the growth factor whereas with leverage, it can “provide a more attractive mix of beta that moderates inherent growth and inflation biases”.

Leverage is also used as a tool to recalibrate risk levels across the total fund.

“For example, if higher-risk private-market exposures increase, total fund leverage can be reduced to maintain the calibrated risk target. If it declines, leverage can increase accordingly,” the paper said.

“In this sense, leverage functions as a balance sheet risk stabiliser: it absorbs shifts in portfolio composition and risk conditions while preserving overall portfolio risk.”

Leverage goes hand in hand with liquidity management which the fund considers on two dimensions: market liquidity (the ability to transact without great price impacts) and funding liquidity (meeting cash obligations).

“Liquid capital—unencumbered assets within the passive balancing portfolio—is structured to absorb shocks while remaining invested… In contrast, the active portfolio is treated as illiquid to preserve the integrity of long-term investment strategies,” the paper said.

“Resilience is monitored through multi-horizon liquidity coverage ratios, which test whether coverage assets, net of haircuts and combined with forecasted inflows, are sufficient to meet stressed obligations. Leverage capacity is explicitly linked to these thresholds.”

The fund conceded that TPA does require investors to be able to handle more portfolio complexities, but in an environment defined by geopolitical upheavals and regime shifts, “prudent design and adaptability matter more than speed”.

“The total portfolio approach cannot eliminate uncertainty, but when properly implemented, it does help build resilience to it. In doing so, it creates a durable institutional advantage for long-horizon investors like CPP Investments, strengthening our ability to weather the storms ahead.”

You can read the paper written by Sally Shen, Derek Walker and Geoffrey Rubin (featured above) titled "Investing in Uncertain Times: Achieving Disciplined Flexibility in the Total Portfolio Approach" on CPP Investments' website here , and the report can be downloaded here.

It is excellent, an in-depth look at a topic that everyone is discussing but few have mastered.

I'm not going to print it all here but like the way it begins:

Markets have entered a period of sustained geopolitical and economic uncertainty. Wars in Europe and the Middle East, fragmentation among major economies, inflation shocks, and volatile liquidity and financing conditions have unsettled long-standing market frameworks, challenging assumptions about diversification and correlations across assets and risk factors. For institutional investors, the question is no longer whether shocks will occur, but how to ensure their portfolios are resilient and responsive when they do1. In this environment, the Total Portfolio Approach (TPA) is often presented as an antidote to uncertainty, a framework that promises adaptability across market environments. Yet there is limited clarity on how that flexibility works, how it is implemented, and what its limitations are. Indeed, flexibility within a TPA is not a “magic wand” of unconstrained agility that can address all threats to a portfolio. Rather, it is a governance and portfolio management architecture that builds an exposure profile that can adjust as conditions change. This stands in contrast to traditional strategic asset allocation frameworks, where implementation is largely fixed once targets are set. Within calibrated risk targets and centralized governance, TPA enables relative value–driven adjustments and multiple channels for delivering exposure while maintaining alignment with long-term total Fund objectives across market cycles. Flexibility, in this context, is a structural feature of the portfolio management architecture, not just an episodic tool deployed only in moments of opportunity or threat. This paper examines how Canada Pension Plan Investment Board (CPP Investments or the Fund) implements disciplined flexibility within its Total Portfolio Investment Framework, focusing on exposure2, leverage, liquidity and currency management, and relative value decision-making. It explores how these mechanisms interact to deliver a diversified portfolio at a calibrated total Fund risk target while enabling capital to move to its highest-value use as conditions change. This supports the Fund’s ability to remain invested and resilient through different phases of the cycle in pursuit of its 75-year horizon.

The Evolution of a Total Fund Model

CPP Investments’ Total Portfolio Approach didn’t emerge fully formed. It evolved over time—from a relatively simple set of constructs guiding different aspects of the Fund’s portfolio construction, such as the risk targeting framework, to a fully integrated framework that calibrates risk, manages exposures, and considers alpha opportunities, while simultaneously integrating liquidity, leverage, and currency considerations. This evolution reflects CPP Investments’ legislated mandate to maximize returns without undue risk of loss, having regard to factors that may affect the plan’s funding and ability to meet its financial obligations. Risk is therefore assessed with a focus on long-term outcomes, and the organization has the flexibility to align its processes with that mandate.

CPP Investments' has a huge balance sheet and arguably the best team to undertake this total portfolio approach which can be complex at times.

There are a lot of moving parts to its portfolio and at the total fund level, you need a team to make sure risks across public and private markets are being monitored and taken appropriately. that leverage is used to enhance diversification and recalibrate risks across the total fund, and that currency risk is managed well.

The paper concludes by stating this:

Disciplined flexibility is the defining advantage of a Total Portfolio Approach—but only when it is carefully designed and managed and the investor can handle the greater complexity of its day-to-day implementation. At CPP Investments, flexibility is embedded through calibrated risk targets, centralized balance-sheet management, and a relative value discipline that allocates scarce capital to true incremental risk-adjusted return. Flexibility in this framework extends beyond avoiding forced selling to include increased capabilities in implementation, separation of alpha from beta decisions, and the ability to redeploy as views of prospective risk and return change, without compromising total Fund targets. In an environment defined by geopolitical fragmentation, liquidity shocks, and regime shifts, prudent design and adaptability matter more than speed. This flexibility is what enables CPP Investments to remain disciplined through cycles, reinforcing its ability to invest against its long-term mandate. The Total Portfolio Approach cannot eliminate uncertainty, but when properly implemented, it does help build resilience to it. In doing so, it creates a durable institutional advantage for long-horizon investors like CPP Investments, strengthening our ability to weather the storms ahead. 

What I like about this paper is that it clearly outlines how they implement TPA, what it can do and what it cannot do.

They're not looking to be cowboys here, they want to strengthen the total portfolio's resilience and risk-adjusted returns using all the tools available to them.  

In this environment, a great TPA team is critically important.

Lastly, a huge shout-out to Sally Shen, self-proclaimed pension nerd. Sometimes I feel like she's the only person who truly appreciates my comments and understands my passion for the subject matter.

Below, in an increasingly complex and fast-moving risk environment, judgment and discipline matter more than ever. Priti Singh, Chief Risk Officer, shares how CPP Investments approaches risk through a total portfolio lens, and how institutional investors are balancing speed, uncertainty, and long-term decision-making in a changing world.

Also, in this conversation with Bloor Street Capital, Frank Ieraci, Global Head of Active Equities, discusses how CPP Investments approaches risk, asset allocation and security selection across global markets.

He explains how CPP Investments targets risk rather than static asset allocations, how active management drives alpha in public equities, and how the Fund navigates uncertainty in areas such as geopolitics, artificial intelligence and energy transition.

Frank also reflects on investing in Canada, global diversification and what differentiates CPP Investments’ platform from traditional money managers.

John Rapley wrote a comment for the Globe and Mail stating that our pension funds must be sovereign wealth funds, too – even if pensioners take a hit:

This essay is part of the Prosperity’s Path series. In a time of geopolitical instability and a shifting world order, the challenges facing Canada's economy have only gotten more visible, numerous and intense. This series brings solutions.

When the 2008 financial crisis struck, the Bank of Canada followed other central banks in flooding the economy with money, by slashing interest rates and buying government debt. This juiced the economy with borrowed money. But it did nothing to boost its long-term productivity. This effectively took future income and redistributed it to the present.

When wealth races ahead in this manner, something I call the Icarus effect sets in. Initially, rising wealth raises a country’s growth rate by, among other things, creating a larger pool of capital to support investment. But past a certain threshold, wealth becomes a dead weight.

A greater share of investment tends to go to real estate, which sucks income into paying rents – not just on homes but on commercial real estate as well, which raises fixed costs and so can hurt competitiveness. Money gets sucked into stocks as well, but it tends to steer clear of start-ups and innovators and more toward established, conservative but dividend-paying companies. That slows the rate of new business formation and depresses labour productivity. It also undermines regime stability, as young people, who are disproportionately affected, turn against democratic capitalism.

So, if the problem is that the country has enriched itself by redistributing income from the future to the present, the solution is to reverse some of that, ensuring future generations enjoy the same benefits that today’s receive.

The good thing is that we seem to be going in this direction. The past week Prime Minister Mark Carney announced a sovereign wealth fund to invest in nation-building projects and generate returns, “creating even greater opportunities for future generations.” 

On April 27, Prime Minister Mark Carney announced the creation of the Canada Strong Fund, Canada's first sovereign wealth fund.

But Mr. Carney did not go far enough. The fund would have only $25-billion initially. Norway’s sovereign wealth fund, to which Mr. Carney compared Canada’s, has US$1.7-trillion in assets.

There is a next step that governments must take, and that is to expand the mandate of Canada’s pension funds so that they invest more domestically. These funds should effectively become sovereign wealth funds as well.

These institutions manage $2-trillion in assets and have long time horizons. They are big enough, patient enough to make a difference. And they should. Pension funds are, after all, the very embodiment of protecting the future, of deferring income today to spend tomorrow. It’s just that this “future,” and whose future it is, has so far been defined too narrowly.

This idea is admittedly controversial. Two years ago, a group of executives wrote to then-finance minister Chrystia Freeland, calling for the government to “amend the rules governing pension funds to encourage them to invest in Canada.” The initiative stirred considerable pushback, not least from the pension industry itself, which said it would hurt returns. In my own modest contribution to the debate, I doubted the merit of a national-development mandate.

Half of the Canada Pension Plan's holdings are invested in the U.S. economy, an odd mismatch at a time when Canada is trying to lessen its American exposure and fortify its economic sovereignty.

But the world has changed an awful lot since that original debate. After all, Canada did not then face an existential crisis, and the case for a national-development mandate has turned into a national-survival one. Economic sovereignty is what will enable Canada to stand up to a hostile United States, Prime Minister Mark Carney has said. And as former prime minister Stephen Harper said in February, “We must make any sacrifice necessary to preserve the independence and the unity of this blessed land.”

Almost all Canadian pension funds have a purely fiduciary model. Take the biggest of them all, the Canada Pension Plan. As the CPP states, “Our mandate is clear: to invest the assets of the CPP Fund with a view to achieving a maximum rate of return without undue risk of loss.”

But an exception already exists: the Caisse de dépôt et placement du Québec, which has a dual mandate of also contributing to Quebec’s economic development. Notably, this has not proved controversial. Despite the criticism that anything but a purely fiduciary mandate is irresponsible, the Caisse’s returns are in line with other Maple Eight funds. Why not give all funds a similar mandate – and more?

Singapore’s Central Provident Plan provides an illustration of how this can work. Singapore used its pension scheme to accelerate national development by steering toward housing, education and the growth of the local stock market (by allowing members to withdraw some funds to invest in local securities). The results speak for themselves. Measured in per capita income, Singapore was in 1960 poorer than Argentina. Today, it’s richer than Canada.

The specific mechanics might differ greatly – for one, Singaporeans must pay a whopping 20 per cent of their salaries into CPF. But the general idea is worthy of emulation. Canada’s pension system can play a similarly vital role in reallocating resources back into the Canadian economy, steering investment toward emergent businesses with a long-term future and also engaging in a multiyear investment program to build houses, especially at the underserved low end of the market. As happened in Singapore, the reduced cost of housing would free up money for working people, which could then be allocated toward other purposes.

Singapore has seen success using its Central Provident Plan pension scheme to accelerate national development by steering toward housing, education and the growth of the local stock market.

Moreover, while that purely fiduciary requirement has led funds to invest in what they view as stable assets with generous dividends, it has arguably come at the expense not only of the Canadian economy, but of future generations.

For instance, many funds invest heavily in fossil fuels. That neglects the impact carbon emissions will have on future generations and carries an opportunity cost – that money could have gone into other investments. The funds are heavily invested in the U.S. economy – half of CPP’s holdings, for example. That is an odd mismatch at a time when Canada is trying to lessen its American exposure.

An expanded mandate is a way for the funds to fix those issues.

Canada has one of the world’s largest pension funds. As a tool to help steer the country through this moment of difficult transition, and thereby preserve the independence of which Mr. Harper spoke, it could prove extremely potent.

Most Canadian pension funds have a purely fiduciary model, but Quebec’s pension fund manager, the Caisse de dépôt et placement du Québec, has a dual mandate of also contributing to the province’s economic development.

The Caisse’s example notwithstanding, even if an expanded mandate hurts returns, it is a worthy sacrifice. If Canada is to grow its wealth in the long term, and if it’s to build a more dynamic, competitive and diversified economy, over the short term it will need to reduce its wealth. Although wealth is good, since it’s the accumulation of past income surpluses, the problem is that today much of Canada’s wealth is actually the opposite and a drag on growth.

Most importantly, there’s an argument to be made that young people already made their sacrifices for their country and now it’s the turn of their elders.

When the pandemic hit, lockdowns hurt young people’s education, job prospects and mental health, but they were asked to make the sacrifice to protect the vulnerable elderly from COVID-19. They gave a lot. Let them now be assured of a future in a sovereign and prosperous country with the sacrifice that can be made today. 

Oh God! I fundamentally disagree with pretty much everything John Rapley states in his comment, so why am I posting it here?

He's not totally out to lunch. La Caisse has a dual mandate and is delivering solid long-term returns, but I loathe the argument that if La Caisse has a dual mandate, every other major Maple Eight pension fund should too.

Total rubbish! CPP Investments has its own mandate and laws that define its objectives and risk-taking.

All of Canada's Maple Eight invest more than enough in Canada and if Carney governments finally privatizes airports and other major assets, they will invest more domestically.

But let's stop pretending Canada's pension funds will "save our economy" by investing more domestically.

There are intelligent arguments to invest more wisely in Canada, and then there are silly ones like this one.  

Dual mandates are hard; they require great governance and are fraught with risks, like political interference and corruption.

When things go right, you look like a superstar, but when things turn south, you look like a complete fool.

I've seen plenty of organizations suffer major setbacks investing in Canada. I saw the BDC lose its shirt in venture capital during the 2008 GFC. 

Invest more in venture capital, not dividend-paying stocks from stable businesses.  

Really? That's what we want our pension funds to do: to invest more in Canadian venture capital?

Not me, I see a recipe for disaster with this strategy. 

Invest in large infrastructure projects, fine, but in venture capital, tread extremely carefully.

Why? 99 times out of 100, you're going to lose your shirt. 

Notice how Rapley doesn't talk about the insane regulations that have destroyed business formation in Canada. 

No, it's the pension funds' fault for not investing more in venture capital.

Give me a break!

What other nonsense? Oh yeah, how dare CPP Investments invest in oil and gas companies and put 50% of its assets in the US?

Well, thank god John Rapley isn't in charge of asset allocation at CPP Investments. 

Lastly, he writes:

Most importantly, there’s an argument to be made that young people already made their sacrifices for their country and now it’s the turn of their elders. 

Seniors on a fixed income who paid into the CPP all their lives are in no position to make sacrifices, nor should they be asked to.

The job of every pension fund in Canada is to make sure all members -- young and old -- are taken care of when they retire. Full stop.

Dual mandates sound cool but in practice they can be hell, especially if the governance is all wrong and governments continuously interfere in the investment process. 

We all deserve better, a lot better, and we need to trust the fiduciaries of our large pension funds. 

I don't know where this Canada Strong Fund is headed. As I wrote, I have my doubts but want it to succeed. 

I think our government is on the right track if it privatizing airports and other large infrastructure assets.

That all remains to be seen.

But changing the mandate of our large national pension funds to emulate La Caisse or Singapore’s Central Provident Plan?

No thanks, I think we are on the right path and Trump Derangement Syndrome is leading some commentators into recommending the wrong long-term path. 

Below, Prime Minister Mark Carney introduced a sovereign wealth fund for Canada to bolster national projects, create jobs and grow taxpayer money — but it's not a sovereign wealth fund in the traditional sense. Andrew Chang explains the stark differences between the Canada Strong Fund and other countries' sovereign wealth funds, and what we know so far about how it will work.