Global Insight Weekly

Global Insight Weekly - March 6, 2026

With tensions rising in the Middle East, we reviewed how past military conflicts have affected markets. Historically, markets tend to react in the short term but recover relatively quickly.

Highlights:

• Short-term volatility is common: In 20 major conflicts since WWII, the S&P 500 declined about 6% on average, but recovered to pre-event levels within about 28 days in most cases.
• Oil prices are the key risk: Larger market declines have typically occurred when energy supply disruptions caused oil shocks, such as during the 1973 oil embargo and 1990 Gulf War.
• Current economic backdrop is solid: U.S. consumer spending, employment, and corporate earnings remain relatively strong heading into this geopolitical uncertainty.
• Potential risk if conflict escalates: A prolonged conflict could push oil prices above $100 a barrel, which may increase inflation and pressure economic growth.
• Expect volatility: Even in years that post positive gains, market pullbacks (10% or more) are common and within the range of normal market fluctuations.

Additional highlights over the week:

• Disruptions in Qatar have removed nearly 20% of global LNG supply. The U.S. has steadily grown its position as an LNG powerhouse, increasing its share of global exports to 26% in 2025 from 14% in 2020.
• Canada–India relations improving: Both countries aim to double trade to $70 billion by 2030, focusing on sectors like energy, nuclear power, and critical minerals, including a potential long-term uranium supply deal.
• Heavy dependence on Middle East energy imports makes Japan sensitive to higher oil prices, with more than 90% of its crude oil being imported from the region.
• China set a 4.5–5.0% GDP growth target for 2026, its lowest in over 30 years, signaling a shift toward more sustainable but slower economic growth.

While geopolitical events can create short-term market swings, history shows markets often recover quickly. Maintaining a long-term investment approach remains important, particularly while economic growth and corporate earnings remain stable.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.

Global Insight Weekly - February 27, 2026

U.S. companies have now posted five straight quarters of double-digit earnings growth, which is a positive sign for equity markets. Canadian banks also reported strong Q1 2026 results with record profits and improved returns. However, fewer companies are beating expectations by wide margins, which makes markets slightly more sensitive to disappointing results. In this environment of elevated stock valuations, even small shortfalls could trigger larger market moves.

Big Tech Under Scrutiny

Investors are increasingly demanding proof that massive AI investments are generating real profits, not just hype. Even when major tech firms exceeded expectations and raised future guidance, markets responded cautiously. This signals that the bar for AI-related gains has been raised, and companies will need to demonstrate concrete returns to justify the enthusiasm around artificial intelligence.

Trade Policy Creates Near-Term Uncertainty

Market reaction was relatively muted following the Supreme Court ruling which struck down the tariffs previously imposed under the IEEPA act. The Trump administration imposed new 10% global tariffs (potentially rising to 15%) under Section 122. These levies can only remain in place for 150 days without Congressional approval. Canada is relatively protected - 90% of exports to the U.S. remain tariff-free under current trade agreements.

The real test for Canada comes with the USMCA review scheduled for July. Our base case remains that the core agreement framework stays intact, given deeply integrated North American supply chains and the shared economic costs of disruption. That said, we expect negotiations to involve political signaling and sector-specific pressure points that could stoke near-term uncertainty, which could create more significant economic impacts for Canadian businesses and investors.

Strong earnings provide a solid foundation for equities, but elevated stock valuations mean markets are more vulnerable to surprises. Trade uncertainty may create short-term headwinds, however steady economic fundamentals continue to benefit portfolios.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.

Global Insight Weekly - February 20, 2026

After months of uncertainty, U.S. tariff rates have settled at around 10% - lower than many feared but still the highest level since 1946. While this is a significant increase from the 2.4% before President Trump's second term, it's well below the +20% levels that had sparked widespread concern earlier in 2025.

For everyday consumers, the impact is being felt primarily through higher prices on goods. About one-third of tariff costs have been passed directly to consumers, while businesses have absorbed the remaining burden. Economists estimate this adds roughly $1,000 to $2,100 in annual costs per household, depending on the analysis. While this has contributed to keeping inflation somewhat elevated, the overall impact appears to be less severe than originally predicted.

We believe elevated tariff levels are likely here to stay. Tariffs have become a significant revenue source for the federal government—collecting $264 billion in 2025 alone. Even if a new president takes office, there will likely be a strong incentive to maintain at least some of these tariffs to support government revenue and address budget deficits.

While tariffs have helped reduce the U.S. deficit to 5.4% (from 6.9%) of GDP in 2025, they fall far short of addressing the underlying fiscal challenge. The Treasury Secretary's goal is to reach 3% by 2028, but tariffs alone cannot close this gap given the high costs of programs like Medicare, Medicaid, Social Security, and defense.

Other notable highlights –

• After underperforming large caps by over 65% from 2021 through October 2025, small-cap stocks have reversed course with an 11% outperformance since then. This turnaround appears fundamentally grounded: stabilizing interest rates have eased balance sheet pressures, earnings forecasts are improving, and market leadership is broadening beyond mega-cap stocks.
• While small caps remain sensitive to Federal Reserve policy shifts and near-term volatility could persist, the combination of strengthening fundamentals, broader market participation, and compelling valuations indicates this rebound could prove durable rather than temporary.
• To reduce Canada’s reliance on U.S. suppliers, Prime Minister Mark Carney announced a $6.6 billion plan to boost Canada's domestic military production to 70% by 2035, up from one-third today. Focus spans 10 key areas including aerospace, ammunition, drones, and AI. The strategy is expected to create 125,000 jobs, lift defense exports by up to 50% and boost revenues by 240%. However, existing defense contracts and deep integration with U.S. systems suggest implementation will likely be gradual and incremental rather than a rapid overhaul.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.

Global Insight Weekly - February 13, 2026

Europe exceeded expectations in 2025, achieving 1.4% annual growth with major economies like Germany, Italy, and Spain all accelerating. The European Central Bank's aggressive interest rate cuts since mid-2024 helped fuel this recovery, allowing banks to lend more freely and improve their financial strength. Investor confidence has also strengthened, with bond spreads narrowing significantly as previously vulnerable economies improved their finances.

Recent tensions with the United States—including threats over Greenland and tariffs—have prompted Europe to pursue greater independence. The EU is now focused on deepening its internal market, securing new trade deals with countries like India and Mercosur, and significantly boosting defense spending. Germany's €500 billion infrastructure investment program is expected to drive continued growth in 2026, with RBC forecasting 1.8% GDP growth, above consensus expectations.

European stocks are trading at premium valuations, but this appears justified given improving economic momentum and earnings prospects. The strongest opportunities lie in German industrials, defense, materials, and banks—sectors that benefit from infrastructure spending and favorable lending conditions. While political risks in France and a strong euro present some headwinds, Europe's strategic repositioning and fiscal support create compelling long-term investment potential.

Other highlights include:

• Canada lost 25,000 jobs in January, the first decline in five months, with weakness concentrated in Ontario manufacturing due to U.S. trade policy concerns. However, the unemployment rate fell unexpectedly to 6.5% because fewer people sought work, reflecting slowed immigration and demographic factors rather than economic distress. As population growth slows due to reduced immigration targets, fewer workers entering the labor force means smaller job gains are sufficient to maintain stable unemployment—a dynamic likely to persist in 2026.
• Japan's stock market rallied following Prime Minister Sanae Takaichi's decisive electoral victory, with the Liberal Democratic Party securing a supermajority of 316 of 465 parliamentary seats. This outcome strengthens political stability and policy clarity while supporting continued shareholder-friendly corporate reforms and solid earnings growth. The result also benefits global markets given Japan's significance as the world's second-largest developed equity market and fifth-largest economy.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.

Global Insight Weekly - February 6, 2026

President Trump has nominated Kevin Warsh to replace Jerome Powell as Chair of the Federal Reserve—a significant moment, as Fed chairs are rare (only 17 in over a century). While Warsh has indicated support for lower rates, his track record suggests he's a fiscal conservative who may prioritize controlling the Fed's massive $6+ trillion balance sheet over aggressive rate cuts.

Markets reacted negatively to this news. Since last Tuesday, Bitcoin has declined by more than 25%, gold is down sharply, the dollar has rallied and the S&P500 dropped to the lowest level since last December - the opposite of what typically happens when rate cuts are expected.

We don't expect rates to fall as quickly as the administration hopes. Rate decisions will still be driven by economic data and determined by the full committee, not just the chair. Currently, markets are pricing in only about 50 basis points of rate cuts for all of 2026—far below the administration's goal of 200–300 basis points. If the Fed holds rates steady at the June meeting when Warsh takes over, or if cuts remain modest throughout the year, expect continued market volatility and potential political pressure.

Other notable highlights over the week include:

• Canadian tech stocks have fallen over 15% this year as investors worry AI could disrupt the software industry's competitive advantages. However, companies with strong proprietary data, specialized expertise, and high switching costs may weather the storm—management teams will need to prove their AI strategies work.
• Canada's economy showed no growth in November. Economists expect a slight contraction in Q4 2025 and modest 1.3% growth for 2025. The Bank of Canada is likely to keep interest rates unchanged in 2026 as it balances slow growth with inflation concerns.
• The Bank of England kept interest rates at 3.75%, however delivered a surprise as four members voted in favor of a cut compared to the expectation for two votes. Markets are now placing a 63% probability of a cut in March from 18% previously.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.

Global Insight Weekly - January 30, 2026

U.S. earnings season is progressing well, with more than a quarter of S&P 500 companies reporting Q4 2025 results and beating consensus profit estimates at near-historical average rates. However, elevated valuations suggest significant optimism is already reflected in prices.

The pace of positive surprises has moderated compared to prior quarters. Investors are becoming increasingly selective, shifting focus toward the quality of earnings—particularly companies demonstrating tangible returns on AI spending alongside durable cash flows, strong balance sheets, and consistent shareholder returns through dividends and buybacks.

In Canada, earnings season is still early, with large banks reporting solid results, and more companies are set to report in the weeks ahead. Consensus expectations point to high-single-digit earnings growth in Q4 2025 for the S&P/TSX Composite and double-digit growth in 2026.

Central Bank Stance and Economic Outlook

Both the Bank of Canada and Federal Reserve held interest rates unchanged at their latest meetings this week. The BoC remains patient, supported by expectations of modest labor market rebound and economic growth recovery, while monitoring trade policy uncertainties and upcoming USMCA renegotiations. The Fed's decision to pause its rate-cutting cycle reflects confidence in underlying U.S. economic strength, even as inflation persists above target. Fed Chair Powell emphasized a data-dependent approach, suggesting future rate cuts will be gradual and carefully calibrated rather than aggressive.

Both central banks maintain flexibility to adjust if economic conditions materially change.

Political and Policy Uncertainty

Despite continued economic resilience, U.S. policy uncertainty has resurfaced. Immediate risks include a potential partial federal government shutdown as early as this weekend due to Senate disagreements over Homeland Security funding. Broader concerns persist around tariff policy, trade tensions with Canada, and domestic stability surrounding immigration enforcement.

While such disruptions weigh on economic activity short-term, historical evidence suggests impacts are typically temporary with lost output largely recouped once government reopens.

Takeaway

Corporate earnings and underlying economic fundamentals remain broadly supportive of equity markets, even as policy uncertainty and elevated expectations introduce the potential for short-term volatility. While market pullbacks can be uncomfortable, maintaining a long-term perspective remains essential.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.

Global Insight Weekly - January 23, 2026

Over the past decade, the S&P 500, which has historically been viewed as a balanced cross-section of the U.S. economy, has slowly transformed into a tech- and AI-dominated index.

As we begin 2026 with markets at record highs, this is top of mind for investors. While the index was once a broad representation of the U.S. economy, it has increasingly transformed into a tech-heavy, AI-driven vehicle. Today, the top 10 companies account for roughly 41% of the index’s weight.

While these market leaders remain highly profitable with strong balance sheets, their market valuations have begun to outpace their actual earnings contributions. This disconnect introduces specific risks that make it difficult for passive indexing to shield from:

• Idiosyncratic Shock: With single stocks like NVIDIA commanding nearly 8% of the index, an isolated earnings miss can trigger significant index-wide volatility.
• Correlation risk: Unlike the diversified leaders of the 1990s, today’s giants are all tethered to the same theme—AI monetization. This turns the S&P 500 into a directional bet on a single industry.
• Passive concentration trap: Passive index inflows disproportionately flow into the largest names regardless of fundamentals. For example, more than $40 of every $100 invested into an index tracking fund flows into just 10 companies, potentially creating a feedback loop that inflates valuations.

In this environment, we believe the benefit of active fund management is more critical than ever. By utilizing an actively managed approach, we can look beyond the top-heavy index to identify undervalued opportunities and mitigate the risks of over-concentration.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.

Global Insight Weekly - January 16, 2026

Markets have entered the new year digesting a steady stream of headlines, underscoring the importance of staying focused on fundamentals.

Geopolitics

The year has begun with heightened geopolitical activity, led by U.S. actions in Venezuela alongside renewed tensions involving Iran and Greenland.

In Venezuela, the removal of President Nicolás Maduro and the possibility of U.S. involvement in rebuilding the country’s oil sector have revived expectations that production—currently near 1 million barrels per day—could rise over time.

However, decades of underinvestment, infrastructure decay, corruption, and political instability suggest that any supply recovery would be slow, costly, and complex.

For Canada, the longer-term risk is competition from Venezuelan crude for U.S. refiners, which rely heavily on Canadian supply. That said, Canada benefits from an entrenched pipeline network into the U.S. and improved export optionality following the Trans Mountain Pipeline expansion to the west coast, both of which should help preserve market share.

Elsewhere, the U.S. administration has warned Iran about civilian harm in the regime’s suppression of widespread domestic protests and reasserted its desire to “acquire” Greenland. While these events underscore persistent geopolitical uncertainty that may bring episodes of market volatility, the broader lesson from recent years has been the importance of maintaining perspective—avoiding overreaction to headlines and focusing instead on economic fundamentals and corporate earnings trends.

Corporate earnings

Corporate fundamentals remain constructive. Forward earnings expectations across major markets continue to trend upwards, and the U.S. Q4 2025 earnings season began this week, with analysts expecting high-single-digit earnings growth for the S&P 500 Index. More broadly, after approximately 12% global earnings growth in 2025, consensus expectations point to a further 14% increase in 2026.

While a good deal of economic and earnings optimism may already be reflected in valuations—which remain above long-term averages and can thus leave markets more sensitive to negative surprises—consistent earnings delivery can help support elevated multiples.

Central banks

In Canada, recent labour market data could allow the Bank of Canada (BoC) to remain patient. Both RBC Economics and futures markets expect the BoC’s benchmark rate to remain unchanged over the coming quarters.

In the U.S., markets are currently anticipating roughly 50 basis points of rate cuts over the next 12 months. However, uncertainty surrounding the legal status of certain tariffs continues to cloud the economic outlook and post a challenge for Federal Reserve (Fed) policymakers.

Separately, recent headlines regarding subpoenas served by the U.S. Justice Department related to Fed building renovations have renewed debate around central bank independence. Nevertheless, the near-term risks of a politicized Fed seem relatively contained, given the strength of U.S. institutional checks and balances. Notably, several prominent Republican senators have committed to defending the Fed through their authority to advance Fed nominations, and Fed Chair Powell’s vigorous response has likely increased the likelihood that he remains on the Fed’s board beyond the end of his term as chair in May. Importantly, market reactions typically associated with threats to central bank independence—such as higher inflation expectations—have remained muted, suggesting continued investor confidence in U.S. institutional safeguards.

Takeaway

While geopolitical developments and policy uncertainty may drive intermittent volatility, corporate earnings and underlying economic fundamentals remain the primary drivers of equity markets. These factors continue to look supportive in the quarters ahead.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.

Global Insight Weekly - January 9, 2026

Markets closed out 2025 on a strong but volatile note, as investors navigated geopolitical risks, shifting expectations for interest rates, and growing debate over the sustainability of the artificial intelligence rally.

• Canadian equities posted leading returns, bolstered by materials and financials, and specifically gold.
• Investors questioned U.S. exceptionalism and rotated into International and Emerging Markets, bringing valuations outside of the U.S. higher.
• Japan continued its multi-year bull run, with the Nikkei 225 surpassing 50,000 for the first time in history.

Trade policy remained a central focus. The Supreme Court is expected to rule early in 2026 on the legality of President Trump’s emergency tariffs, not to mention the upcoming USMCA review which will likely be a key headline until a new agreement is reached.

Geopolitical developments influenced global markets in 2025, and this has continued in 2026 with the recent events in Venezuela, and continued commentary from President Trump regarding Greenland.

Thus far, there has generally been a muted market response to Venezuela, apart from the potential impact on Canada’s heavy oil producers, which introduces a longer-term, rather than immediate, concern for Canada. Decades of underinvestment, operational deterioration, corruption, and political instability suggest that any increase in supply would be slow.

Please click here to access this week's Global Insight Weekly where I have highlighted what I consider interesting/importat takeaways. 

Global Insight Weekly - December 19, 2025

As we approach the final weeks of 2025, we now look to the trends and themes that are shaping the economic landscape heading into 2026 and beyond.

2026 Outlook

Macro themes that can endure for long periods arguably matter most to financial markets. As we look ahead, there are signs of change where the world shifts from a U.S.-led rules-based order to a multipolar, power-based framework, potentially increasing conflict risks and military spending. While AI is expected to remain a central growth theme for decades, the U.S. economic advantage and the dollar’s clout may erode over time due to declining immigration and policy decisions.

Equity markets have rewarded investors handsomely over the past few years, and while they are expected to continue to grow, the expectation is for ‘positive’ as opposed to ‘above average’ appreciation. The S&P 500 is projected to achieve mid-single-digit returns plus dividends if inflation moderates further, enabling additional Fed rate cuts. Global large-cap indexes (e.g., in Canada, Europe, and Japan) are also poised for mid-single-digit returns, supported by stimulative monetary/fiscal policies and increased defense spending.

Current update

Central bank policies are diverging globally. In the U.S., labour market is cooling with rising unemployment and slowing inflation, however the recent releases have been taken with a grain of salt and saw muted market reaction given the U.S. government slowdown and data distortion.

The Bank of England cut rates by 25bps to 3.75%, while the European Central Bank held rates steady. In Asia, we see contrasting dynamics as China grapples with a property sector downturn, while Japan is widely expected to raise interest rates by 25bps to 0.75%, the highest level in 30 years.

Happy Holidays

As the holiday season arrives, we wish you and your loved one’s warmth, joy, and good health. May this time be filled with meaningful moments, rest, and memories. Thank you for your continued trust and confidence over the past year, and we look forward to supporting you in the year ahead.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.