Big flex

Good morning. A flight in California was delayed by more than an hour because of issues with one of the passengers. No news there, except that the problematic passenger was a 70-pound robot named “Bebop,” whose lithium battery exceeded the airline’s safety limits. 

Now that we have robots who can cause flight delays, we just need to program them to hog the whole armrest and play videos on their phone speakers to fully replicate the experience of being stuck on a plane with someone who ruins the flight for everyone.

Today’s reading time is 6 minutes.

Markets this week: It’s another important earnings week, with 126 companies on the S&P 500 reporting along with 91 TSX-listed firms. Earnings from last week were strong enough to support a continued run-up in stock indexes, pushing the S&P 500 and Nasdaq to new highs. Some names to watch this week are Palantir, chipmaker AMD, Walt Disney, Shopify, and Telus.

The future of the global auto industry was on display at the world’s largest auto show in Beijing last week. Whether North American automakers will be a part of it is still TBD.

What happened: The Beijing Auto Show wrapped yesterday, with nearly 1,500 (mostly electric) vehicles showcased, many boasting futuristic features, powerful specs, and prices that seem almost too low to be believed. 

Why it matters: The show was a stark illustration of the divergence between China’s automakers and their North American competitors. While the former grabs more of the world’s EV market share, the latter have been paring back their EV ambitions, taking enormous financial hits as they walk away from investments in the technology. 

Why it’s happening: China’s massive industrial base and dominance of key supply chains for EV components, particularly batteries, has given its automakers a major leg up on GM, Ford, and Stellantis.

Zoom out: Globally, EV sales are still rising, up 17% in China last year, 33% in Europe, and 48% in the rest of the world. The North American car market, and its carmakers, are the outliers — and at risk of being left behind.

The U.S. plans to escort ships out of the Strait of Hormuz. Donald Trump said the U.S. would help “neutral” ships that have been stuck in the strait because of blockades to exit the waterway. The announcement was light on details, but may be a challenge to Iranian control of the strait. Iran reportedly made a new peace proposal over the weekend, but Trump said he was “not satisfied” with it. (Reuters)

A court in China ruled that a company broke the law by firing a worker to replace him with AI. The worker was dismissed by a tech company that cited the impact of AI as a reason for the dismissal, a justification that the court in Hangzhou found unlawful. The company has been ordered to pay the worker additional compensation for wrongful termination. The decision could set a precedent for a country that is rapidly adopting AI tools with the potential to displace workers. (NPR)

The U.S. announced it’s withdrawing troops from Germany. The U.S. will pull around 5,000 troops out of Germany, a number that could rise “a lot further,” according to Donald Trump. It’s unclear exactly what prompted the decision, but it could be retaliation for German Chancellor Friedrich Merz’s comments last week that the U.S. was being “humiliated” by Iran. The withdrawal is a sign of the deteriorating relationship between the U.S. and Europe and will likely raise concerns about the U.S. commitment to NATO. (Associated Press)

📡 What else is on our radar:

With the ServiceNow AI Control Tower, you get a real-time view of any model, data source, and AI agent working across every corner of your business. So you can manage performance, protect your sensitive data, and make confident decisions. All in one place.

🛠️ New jobs numbers for Canada and the U.S. The latest Labour Force Survey from Statistics Canada arrives on Friday. We’ll be looking to see how the labour market is recovering after a bad start to the year. Some forecasters expect to see unemployment fall on the basis of lower immigration levels and more people aging out of the workforce. In the U.S., nonfarm payrolls numbers this week are also expected to show modest job growth in April accompanying a steady unemployment rate. 

🇬🇧 Local elections in the UK could threaten Starmer. Regional elections in the UK could spell trouble for Prime Minister Keir Starmer, whose Labour Party trails badly in the polls to a growing array of opposition parties. The centrist Liberal Democrats, left-wing Greens, and populist right-wing Reform all stand to gain ground. Starmer has become historically unpopular and is facing mounting discontent inside his own party. A poor enough performance could trigger his exit and the elevation of a new leader from the Labour benches to govern Britain.

🇪🇺 Carney in Armenia for European co-operation summit. Prime Minister Mark Carney is in Armenia today as part of the European Political Community gathering, making Canada the first non-European country to attend the meeting. Carney will meet with the leaders of Ukraine, Spain, Italy, and Poland, along with EU officials.

A relatively small item from last week’s Spring Economic Update could have major implications for business ownership in Canada.

What happened: The federal government announced last week it would make permanent a juicy tax incentive for business owners who want to sell their companies to employees. 

Why it matters: With more than 75% of small business owners planning to exit over the next decade and $2 trillion in assets at stake, it’s a change that boosters say could give more employees a stake in their workplace and keep businesses under Canadian ownership.

Catch up: EOTs are a relatively new legal structure that allow company owners to sell their businesses to rank-and-file employees while still leaving day-to-day decision-making to management (which sets them apart from workers co-operatives).

Zoom out: In the U.S., almost 15 million employees participate in a similar employee ownership model, and are typically much better off financially than the typical worker, quitting their jobs at one-third the national average rate, enjoying 92% higher median household net wealth early in their careers, and ending up with more than double the retirement savings.

Go deeper with full coverage of this update on our website contributed by Peter Nowak, publisher of Do Not Pass Go.

The people keeping Canadian companies financially sound rarely get a standing ovation, and Float wants to change that. The Emerging Leaders List is calling for nominations, and Float is proud to sponsor the Finance category.

Top nominees get:

The people building Canada's financial future deserve their moment. Nominate them at emergingleaderslist.com.

🗳️ 27%. Percentage of Albertans who say they would vote for separation from Canada in a referendum, according to a new poll, while 67% said they would vote against leaving. Those shares are virtually unchanged from polling done this time last year.

^{*This is sponsored content.}

We would never lean on a cheap “May the 4th be with you” quip to introduce today’s games. Instead, we’ll just wish you good luck with the mini-crossword, sudoku, Codebreaker, and Who’s Who!