Global Insight Weekly

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.

Global Insight Weekly - December 12, 2025

After three successive years of above-average market gains, delivering a fourth will be a tall order and dependent on the major economies, especially the U.S., avoiding recession.

Consensus estimates for US. 2026 GDP growth increased this past week. Several factors led to this increase which include a rebound from the government shutdown, the lagged effect of monetary easing, and a capital spending boost from tax policy changes. AI is also very important to GDP growth expectations in 2026 and beyond because of the dramatic growth in capital spending by the big developers and the expectation that more and more successful applications of AI will emerge.

Most developed economies are running stimulative monetary and fiscal policies in the same direction of the United States. These include interest rate cuts by central banks, a commitment to much higher defense spending, initiatives to boost power-generation capacity and strengthen grids, as well as to develop AI capability.

We see the potential for another year of positive gains for most major stock markets – but likely at a more sober pace. Slower earnings growth is the more likely outcome outside of the United States.

However, the path forward holds many challenges which includes improving GDP growth, trade uncertainties, mounting fiscal debt burdens, and fraught politics. The ability for market momentum to continue will be predicated on successfully balancing these various factors.

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

Global Insight Weekly - November 21, 2025

Many economic headlines over the last year have referenced the U.S. economy as “K” shaped – but what exactly is this? At a high level, it is a multidecade process of economic divergence that has resulted in what is effectively a two-tier economy. Higher-income households increasingly driving the economy and enjoying the benefits of its advance, with lower-income households facing increasing cost pressures and finding it difficult to get ahead. While wages have increased, so too has the cost of living, thus making it difficult for lower income households to afford discretionary investment.

The largest component of the U.S. economy is by far consumer/household consumption. Consumer spending accounts for almost 3 times as much economic activity as government or business spending. That spending, however, comes from the top 10% of households. Consumption by 10% of households drove 34% of all economic activity in the U.S. in Q2/2025. In fact, the U.S. today is near the highest levels of economic inequality since record keeping began nearly 60 years ago.

When viewed from a different perspective, the top 20% of income earners, directly or indirectly hold 90% of stock investments. This consumption behavior is almost certainly driven at least in part by the performance of the stock market and could mean that even a relatively small shift in consumption patterns could have large implications for the overall economy.

Historically, the methods used by the U.S. Federal Reserve, including keeping interest rates low to encourage spending does not appear to be as effective anymore. While the use of lower interest rates and a weaker U.S. dollar can still be effective, the focus and target of these tools must be revamped to include a broader portion of the population.

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

Global Insight Weekly - November 14, 2025

After more than 40 days, the longest federal government shutdown in U.S. history has officially ended, with President Donald Trump signing a bill to restore federal funding this week. From a market standpoint, we see two key implications. First, the resolution helps remove a notable source of uncertainty that had, at times, weighed on investor sentiment and confidence in the economic outlook. Second, while the shutdown likely caused a short-term slowdown in economic activity, history shows the economy tends to make up lost ground once normal operations resume.

It will take time for federal agencies to restart operations, but the reopening is a positive development—reducing near-term risks to the economy and improving visibility into economic trends.

While the broad indexes recovered from the closing low of the previous week, they surrendered their initial gains as investor enthusiasm for the end of the government shutdown gave way to concerns over a slowing economy.

Canadian Federal Budget

Canada’s federal government released its first budget under Prime Minister Mark Carney last week. The budget built on campaign promises to balance an agenda of substantive investment with fiscal responsibility, featuring expansionary spending aimed at infrastructure, defense, housing and tariff-affected industries.

The fiscal plan is front-loaded: the projected $78 billion deficit for this year (-2.5% of GDP) is materially higher than previously forecast, but the government expects the deficit to decline to $57 billion by 2029–30 (-1.5% of GDP) as expenditure review and operational efficiency savings—including headcount reductions—take effect. While sizeable, the deficit came in lower than some economists anticipated and has not sparked a notable bond market reaction. The minority Liberal government still needs parliamentary support from other parties to pass the budget, but broadly, the budget appears to strike a reasonable balance between strategic investment and fiscal prudence.

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

Global Insight Weekly - October 31, 2025

The U.S. Federal Reserve opted to cut interest rates by 0.25% this week. While inflation remained above the Fed’s 2% goal, the softer-than-expected reading and steady underlying trends gave officials confidence to ease policy.

Fed Chair Powell cautioned, however, that continued data disruptions, given the U.S. government shut down, could complicate future decisions. He noted that another rate cut in December “is not a foregone conclusion,” stressing the Fed’s need to balance “upside risks to inflation and downside risks to employment” amid an increasingly uncertain data environment.

The muted reaction from ‘risk’ assets (ie. equities and corporate bonds) suggest that markets might be content with the Fed positioning.

In Canada, the BoC also lowered rates by 0.25%. Despite a modest uptick in headline inflation, easing business inflation expectations, the removal of retaliatory tariffs, and a tepid labour market provided scope to cut for a second consecutive meeting.

However, policymakers tempered expectations of more cuts in the months ahead, noting that persistent trade disruptions could cause structural scars to the economy, potentially making monetary policy a less effective tool in stimulating growth while keeping inflation anchored around its target range.

Q3 reporting also in the news with just over 50% of the S&P 500 having reported. So far, revenue growth of 7.3% is surpassing the 5.9% consensus. Earnings growth is tracking at 11.1% compared to the initial 7.4% consensus.

Takeaway

With corporate earnings season off to a broadly positive start and central banks moving to support growth, the foundation for cautious optimism in equity markets appears to be intact. The combination of interest rate cuts and resilient earnings reinforces our view that maintaining an “invested but selective” stance remains appropriate.

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

Global Insight Weekly – October 17, 2025

The U.S. federal government remains shut down. While the broader economic impact has typically been modest, the absence of official economic data releases during the standoff adds a layer of uncertainty. For now, investor attention is shifting to the Q3 earnings season, with renewed U.S.-China trade tensions adding to the backdrop of uncertainty.

Quarterly reporting season kicked off this week, with U.S. banks setting a positive tone on the back of strong trading and investing banking revenues. In the absence of official U.S. economic data due to the government shutdown, company earnings and management commentary on the outlook will be especially valuable for insights into economic trends and consumer demand.

Given elevated valuations that already reflect a favorable outlook, strong earnings delivery will likely be essential to support the ongoing uptrend in equity markets.

Canadian stocks have fared well year to date, benefiting from a rally in gold prices and solid performance from the banks. As Canadian companies begin reporting financial results, focus will be on gauging the impact of U.S. tariffs and insights into domestic spending trends.

Trade Tension

China-U.S. trade tensions have resurfaced after China’s recent decision to impose additional export controls on rare earths minerals. In response, the Trump administration has threatened "much higher" tariffs on China, potentially taking effect November 1. The latest escalations may be “tactical posturing” ahead of a bilateral meeting between Presidents Trump and Xi Jinping, which is still expected to take place in late-October. Moreover, the Trump administration has so far shown a reluctance to fully follow through on policies that have generated significant adverse market reactions. The risk of elevated volatility in the near term could linger if talks falter or rhetoric intensifies.

With the U.S. government shutdown clouding the economic picture and renewed U.S.-China trade frictions contributing to uncertainty, we expect the Q3 earnings season to play a central role in providing an update on the economy and anchoring market sentiment. While some short-term volatility is possible, we believe "invested, but watchful" remains a sensible stance for 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 - October 10, 2025

Equity markets are showing resilience and strength. Despite a murky backdrop, and negative headlines, optimism has continued to benefit those who have remained invested.

Major indices are hitting fresh highs, buoyed in large part by momentum in the technology and AI sectors. However, we have also seen a welcome broadening of this strength in non-AI sectors.

The AI boom shows no signs of fatigue. Yet at the same time, gold is having a “contrarian boom” of its own: bullion has surged as risk-averse investors hedge their portfolios amid macro uncertainty. Indeed, gold’s advance reflects a rising fear in markets, with participants seeking shelter even while chasing growth upside in tech.

That said, several headwinds loom. Inflation remains sticky, economic data is mixed (and in some cases weakening), and central banks face the challenge of threading the needle between containing inflation and supporting growth. These forces are largely contradictory—but for now, the stock market continues to rise. In effect, markets are balancing divergent narratives and betting that growth and earnings optimism will overpower the risks.

Within our funds, all these dynamics are being closely monitored and actively managed to balance opportunity with caution. Our investment teams continuously assess market trends, economic data, and sector developments to position portfolios effectively. By dynamically adjusting exposures and maintaining disciplined risk controls, we aim to reconcile near-term volatility with the pursuit of sustainable long-term returns.

In this environment, we must remember that markets can stay resilient even amid conflicting signals—and focus on maintaining a balanced, long-term perspective rather than reacting to every headline.

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