Sunil's Blog & Market Update

Equity markets in Q2 2026 delivered a generally positive, but uneven, performance across regions, shaped by resilient earnings growth, the ongoing AI-driven investment cycle, and elevated geopolitical risks.

Stock markets advanced in May, supported by strong corporate earnings and continued enthusiasm for technology, including AI. At the same time, geopolitical risks resurfaced, reminding investors that volatility remains a feature, not just a “bug,” of the current environment.

Stock markets rebounded strongly in April after weakening in March. The S&P/TSX Composite Index gained 3.7% during the month, helped by strength in the industrial and technology sectors and by strong corporate earnings.

While many factors influence the price of gold, PIMCO believes there is one that can explain the majority of changes in gold prices over the recent history: changes in real yields.

Stock markets were mixed in February. The S&P/TSX Composite Index had a strong month, driven by strong materials and energy stocks. The MSCI EAFE Index also gained ground, while U.S. stock indexes were generally weaker. Fixed income was generally stronger across the board.

The U.S. will charge a 15% tariff rate on the vast majority of EU goods. Key exceptions are steel and aluminium (where the tariff rate will remain at 50%) and aircraft, plus some other goods where the tariff will be zero. Autos, semiconductors, and pharmaceuticals also appear to be subject to the 15% tariff, which is positive given fears of more unfavorable treatment of these sectors.

Investors seem more comfortable with the idea of tariffs, but they’re still likely to play a key role in the direction of financial markets as we approach the final stretch of the year.

The old adage “what goes up, must come down” aptly describes a dynamic economy that has historically followed a cycle of growth and decline. The down period in that cycle constitutes a recession, which affects investment returns across various asset classes.

From tariffs to tensions, markets found a way to deliver

Recent tariff announcements and the potential for escalating trade tensions with key U.S. partners are raising concerns about the return of stagflation, a challenging economic scenario characterized by high inflation, weak growth, and high unemployment.

The intersection between the macro backdrop and the market setting investors must navigate has perhaps never been more apparent than it is today.

Under the new U.S. framework, all countries face a 10% baseline tariff, with significant variations above that depending on country-specific trade policies

Q3 FY2025: Markets resilient in a challenging environment Nine months into the year, markets have been stronger than many anticipated. Equity indexes posted sizeable gains, with the S&P 500, S&P/TSX, and MSCI EAFE up 13.7%, 21.4%, and 22.3%, respectively, year to date.1 Bonds also delivered positive returns of 6.1%, 3.0%, and 7.9% as measured by the Bloomberg US Aggregate Bond Index, the FTSE Canada Universe Bond Index, and the Bloomberg Global Aggregate Bond Index, respecti

Q2 FY2025: Markets digest tariffs and geopolitical tension The second quarter of 2025 was marked by a volatile and complex stock market environment, influenced by various factors such as economic indicators, corporate earnings, and geopolitical events.

In 2025, the U.S. equity market is once again showing signs of imbalance. While the S&P 500 continues to post gains, the rally is being powered by a familiar engine; a handful of mega-cap tech names. Beneath the surface, however, lies a vulnerability that investors shouldn’t ignore—concentration risk.

The currency market is the largest and most liquid financial market in the world. Currencies like the U.S. dollar, the British pound, and the euro trade in the foreign exchange (FX) market 24 hours a day,

Inflation affects all aspects of the economy, from consumer spending, business investment and employment rates to government programs, tax policies, and interest rates.

Young families are being driven from Ontario’s biggest cities, with misguided policies and conversions to rental units limiting the supply of affordable homes with three bedrooms or more, according to the University of Ottawa’s Missing Middle Initiative.

THERE’S NO SHORTAGE OF CRISES: A bloated U.S. debt and a jittery bond market; the unwillingness of Vladimir Putin to negotiate, etc. But there’s one crisis that dwarfs all the rest: Iran.

Developing the infrastructure necessary to make Canada’s economy less dependent on trade with the U.S. “will not be easy, fast, or cheap,” and will require refocusing investment priorities.