The U.S. will be asking all NATO nations to boost defense spending to 5% of GDP, up from 2% currently and above the 4% target Trump advocated for in his last term.

Canada sits well into the bottom third of NATO countries in this regard, averaging 1.3% of GDP spent on defense over the past 5 years.

It feels like the stigma around military spend has changed in the last little while, and we think Canada could join the party.

To the tune of how much? Well, to get to the current 2% target we’d be looking at about $20B in incremental spend. To get to 5%? A whopping $110B of extra spend. Over the medium term, something in the lower end of that range seems feasible.

Our data tells us that defense dollars are increasingly flowing away from people and towards equipment, which means your favourite Canadian defense names would be seeing the flow-through of any incremental spend at the country level!

If the above link won’t work, try this: https://www.bullpen.finance/content/19

We knew renewable energy was in the new President’s scope, but we didn’t know he’d pull the trigger this early! A number of moves geared towards slowing down renewable momentum and speeding up the deployment of fossil fuel solutions have already been made.

Onshore and offshore wind got the worst of it, and solar made it out relatively unscathed. We think this chart makes it clear to see why… too big to fail (for now)!

You’ll notice in that same chart onshore and offshore wind make up 14% of the total U.S. development pipeline, while non-renewable energy sources make up a mere 8%. Take out those wind projects and what do you get? Supply gap.

The U.S. northeast could get hit worse than others, given the high share of wind development and low share of fossil fuel development. Remember, Quebec is a big supplier of electricity to this region, which could become topical soon.

So what does this mean for Canadian power producers? We’d say not too much given current valuation levels, but it certainly doesn’t help sentiment.

There could be a silver lining though, as a supply gap could cause elevated power prices, benefitting companies with an existing U.S. footprint.

If the above link won’t work, try this: https://www.bullpen.finance/content/18

Quick, look, the billionaires are fighting again!

It’s pretty well known that Elon Musk and Sam Altman aren’t exactly on good terms… so when Stargate, a $100-500B JV between OpenAI, Oracle, and SoftBank was announced, Elon wasn’t buying it:

A back and forth between the two continues, but that’s not what this is about.

Andrew Sorkin (CNBC) later asked Microsoft CEO Satya Nadella if they had the money to which he responded:

Check. Mate.

Giving the spotlight to Aecon (ARE) here as their JV with AtkinsRealis (ATRL) was awarded a refurbishment contract for 4 units at the Pickering Nuclear Generating Station. The nuclear wave is the one companies want to be riding right now.