The start of 2026 has not seen too much change especially with all the political events south of the border and the headlines that continually pop up. We seem to have been in a holding pattern since October, with a lot of back and forth but no real upside or downside moves in the indices. The move in gold continues and along with it silver which is reaching levels that seem unrealistic, and when they mention bubble, it is not so much in the AI stocks, but definitely in this commodity, it is getting extremely frothy and dangerous.
In Canada and the U.S., both central banks remain accommodative with the trend still down in rates but again for now we are in a holding pattern. The U.S. still has some positive policies coming with the reduction of taxes on individuals and corporations and the reduction of regulations. Two ingredients that should favor markets. Oil has bounced due to the situation in Venezuela and the issues facing Iran which continue to be unsettled, and I expect more developments coming from this area.
I do feel the oxygen of AI and data centers is getting a little thin and we will need to see how corporations are using this technology going forward. We need to see how and if earnings are moving in the right direction. The big seven corporations continue to spend, and this has helped the U.S. economy and although far from done it is now becoming a show me story and we will see in the next month with earnings. We have a lot of exciting things coming in the technology area, but with valuations this high, we could see a lot of volatility with any negative news item. I have been in this business long enough to know not everything goes straight up. Let’s also keep in mind volatility is not all bad and it can be used to get some good deals as the long term trend of North American markets remains positive.
In Canada, we continue to dance around a trade deal and with the renegotiation of our old NAFTA (USMCA) deal it could get interesting with headlines. The bottom line is a deal is good for all three countries, but I am sure we will continue to face interesting headlines in the next year regarding this. I do believe the oil coming from Venezuela will hurt Canada in our energy area but again we shall see lots of headlines. We do have a big supply of oil coming next year which will pressure this area but with the unrest in the Middle East it could keep prices from falling too far. Natural Gas remains the big source of energy for data centers, and we have positioned for that.
Our themes for 2026 are industrial, energy (nat gas), housing, and robotics. These continue to look like great growth areas, and we continue to look to build positions in these areas.