The Daily Spark

The chart below, from the new book The Everywhere Millionaire, shows that the 400 wealthiest Americans on the annual Forbes list hold about $4 trillion in combined wealth, while the far larger group of private business owners with at least $10 million in net worth holds $46.7 trillion.

Built from the Fed's Survey of Consumer Finances and backed by the authors' decade of work inside de-identified IRS records, the comparison suggests most top-end wealth in the US does not sit with a few household names but with millions of business owners in towns and mid-size cities across the country.

Canada is hosting its Investment Summit over the coming days.

A recent report projected Canada will need US$4.7 trillion in infrastructure investments by 2050, spanning roads, bridges, waterworks, hospitals, data centers and defense. Energy/natural resources are the #1 bucket at one third of this, or $1.6 trillion.

Canada's investment in machinery and equipment is still below where it was in 2007, 19 years on (inflation adjusted). Broader business investment has barely grown, underperforming even the euro area, while the US has expanded steadily, although business investment stirred in Q2, see charts below.

The bottom line is that reversing this requires a step change in business conditions and capital investment from both the public and private sectors. The Investment Summit, co-organized with CPP Investments and PSP Investments, is targeting $1 trillion of fresh investment over five years, particularly focused on energy projects and large-scale infrastructure. It will be a useful lens on how that ambition translates into projects and committed capital.

Written by Huw van Steenis, London

The cost of setting up an LLC ranges from $1,000 in Massachusetts and $890 in California to just $35 in Montana, see chart below.

Too much saving pushed rates down for two decades. The problem was that there was more capital than projects to invest in.

That has now changed. Today, there are more projects than capital.

Think about what that does to price. When capital is abundant and projects are scarce, projects compete for capital, and they compete by accepting a lower return. When projects are abundant and capital is scarce, capital competes for projects, and it competes by demanding a higher return. The return that clears the market is a higher yield.

Take the data center buildout as an example. It is not that the money isn't there. Hyperscalers have raised everything they have asked for. It is that they are paying more for it. Spreads on their longest-dated bonds have widened, and most of the paper issued in 2026 trades wider today than where it priced. Investors are still buying. They are just charging more.

Note where the repricing lands. Data centers, power generation, transmission and government deficits are all long-duration claims on savings. So the competition for capital concentrates at the long end of the curve, which is why long rates have moved more than short rates.

The bottom line is that we have been through a regime change. From a savings glut to a savings shortage, see chart below.

With this backdrop, it is not surprising interest rates are going up.

Data from the S&P 500 second quarter earnings season shows that AI adoption keeps broadening: 69% of companies now point to a live deployment, up from 64% last quarter, see the first chart below.

But the disclosure thins out fast.

Only 29% put a number on a result, 2% report a metric tracked over time, and none break AI value out as its own KPI or P&L line.

Where companies do quantify the impact of AI, the evidence skews heavily toward cost, which accounts for 70% of disclosed proof points versus 22% for revenue, see the second chart. Some of that is timing, since efficiency gains land inside existing operations well before new revenue lines take shape.

That still leaves investors without a verifiable link between AI capex and the top line.

The question is no longer who is deploying AI. It is who can prove the ROI.

For more data and discussion, see the AI Value Gap here.

Countries with larger pension systems have deeper capital markets, see chart below. The US sits at nearly 475% of GDP in pension and household investment assets, and above 200% of GDP in market capitalization. Germany, France, Italy and Spain are all well below on both measures.

What separates them is not just returns, it is the institutional bid. The Netherlands, Denmark and Sweden show what funded pension systems do for capital market depth. Ireland and Italy have now launched auto-enrollment. Germany, Europe's largest economy, is introducing reforms, see also here. Aging societies strengthen the case for creating funded pension schemes.

The bottom line is that pension depth and market depth often move together, and most of Europe has plenty of work to do. Pension funds are natural holders of equities, infrastructure, private credit, private equity and real assets. A deeper institutional savings base broadens demand and expands European markets' capacity to finance growth.

Written by Huw van Steenis, London

In private equity, purchase price discipline pays in every part of the cycle.

When tailwinds are strong, meaning falling rates and steadily expanding exit multiples that lift an asset's value regardless of what the owner does, a high entry price can still work out.

Those tailwinds disappear when rates stay higher for longer. Then the price you paid becomes the whole story.

That is why the cheapest quartile of buyout vintages beat the most expensive in both the 2010 to 2017 boom and the harder 2018 to 2023 stretch, see chart below.

For more, see also here.

Corporate net interest payments have fallen to 0.4% of GDP because firms locked in record-low fixed rates during the pandemic. The US government did not extend the maturity of its debt outstanding when interest rates were close to zero and now pays 3.6% of GDP in net interest, see chart below.

The cost of higher rates landed on the fiscal side rather than the corporate sector, which is a key reason the tightening cycle since 2022 has failed to slow the economy.

Looking forward, however, the corporate tailwind is temporary as pandemic-era debt rolls over into higher coupons, and the impact will be most negative for highly levered borrowers in credit markets, such as software.

The bottom line is that the transmission mechanism of monetary policy was delayed rather than switched off, and it works through the same channel as always: the more debt you have, the more you are hurt by high interest rates, which is a different way of saying that high-quality companies with low leverage and actual earnings are more attractive both from a debt and equity perspective.

The Daily Spark will resume publication on Wednesday, Sept. 9.

Multiple expansion has collapsed to just 8% of private equity value creation in 2025 from 40% before the Fed began raising rates. Value now has to be built rather than repriced, which rewards managers disciplined on entry price and focused on operations.

This week, we not only got a strong employment report, we also saw a strong uptrend in the ISM Services Prices Paid to levels last seen during the 2021 to 2022 inflation surge, see charts below. This points to upside risks to inflation, including the CPI data next week, and we now expect the FOMC to raise interest rates at its September meeting.