Daily market snapshot

Tuesday, 1/27/2026 p.m.

• Stocks finish mixed with earnings in focus – North American equity markets finished mixed on Tuesday, with the S&P 500 and NASDAQ posting gains while the TSX was little changed.* The Dow was the lone major average to close meaningfully lower, weighed down by shares of UnitedHealth Group, which came under pressure following an announcement from the Centers for Medicare and Medicaid Services that Medicare Advantage payment rates will rise by only 0.09% in 2027.* Tariff policy was in the headlines again on Tuesday after U.S. President Donald Trump threatened to raise the tariff rate on select imports from South Korea from 15% to 25%, citing delays in the country’s government in approving the U.S.–South Korea trade deal announced last summer.* However, the market impact was limited, with South Korea’s KOSPI gaining nearly 3% overnight.* On the economic front, the Conference Board's U.S. Consumer Confidence Index fell to 84.5 in January, the lowest reading since May 2014, with uncertainty in Washington, inflation, and labour‑market concerns cited as drivers of the pessimism in the survey’s write‑in responses.* In currency markets, the ICE U.S. Dollar Index was lower again on Tuesday, falling by roughly 1%, with the U.S. dollar also roughly 1% weaker against the loonie.* Bond yields closed little changed in the U.S., with the 10‑year Treasury yield finishing around 4.23%, while Canadian bond yields were modestly higher, with the 10‑year GoC yield ending the session at 3.41%.*
   
• BoC and Fed expected to hold rates steady – In addition to a busy week of corporate earnings, the first BoC and FOMC meetings of the year concludes tomorrow, with markets expecting both central banks to hold policy rates steady.* The Bank of Canada held its policy rate steady in December, noting that it views the current level (2.25%) as about right to balance achieving 2% inflation while still supporting the economy through this period of trade policy adjustment.** Since the December meeting, the BoC's preferred measures have fallen further with CPI-median posting a 2.5% annual gain in December and CPI-trim rising by 2.7%, 12-month lows for both measures.* Barring any shocks to economic growth or inflation, we expect the BoC will likely remain on hold throughout 2026.
  
  South of the border, recent U.S. economic data has been solid, with the Atlanta Fed’s GDPNow tracker projecting fourth‑quarter growth of over 5%.* The U.S. labour‑market has also shown signs of stability, with initial jobless claims averaging just 202,000 over the past month and the unemployment rate declining to 4.4% in December, although job growth remains slower compared with recent years.* With the U.S. economy on stable footing, the Fed is likely in no rush to cut rates, with markets currently expecting the Fed will deliver its first interest‑rate cut of 2026 in June, followed by one additional cut in December.** Encouragingly, despite healthy economic activity, U.S. inflation has continued to trend lower, with core CPI rising 2.6% year‑over‑year in December and just 0.2% on a monthly basis.* In our view, inflation is likely to remain in the 2.5%–3% range in 2026, which we believe will pave the way for an additional 1–2 interest‑rate cuts from the Fed.*
   
• Earnings in the driver's seat — Corporate earnings are in focus Tuesday, with 20 companies in the S&P 500 announcing results today and more than 90 scheduled to report over the course of the week.* In Canada, earnings season will ramp up over the coming weeks with just 3% of companies in the index having reported thus far.* The S&P 500 industrials sector saw several announcements, with United Parcel Service, Raytheon Technologies and General Motors announcing better-than-expected earnings, supporting shares on Tuesday.* Within the health care sector, despite reporting results that were largely in line with expectations, shares of health insurer UnitedHealth Group—along with other health insurers—were under pressure on Tuesday following an announcement from the Centers for Medicare and Medicaid Services that Medicare Advantage payment rates will rise by only 0.09% in 2027, well short of market expectations,* and potentially pressuring insurer profitability. At the index level, estimates call for roughly 7% earnings growth for the S&P 500 in the fourth quarter, which would bring the annual growth rate to just over 11% for 2025.* Encouragingly, strong profit growth is expected to continue in 2026, with estimates calling for S&P 500 earnings growth of nearly 15%, and all eleven sectors projected to see positive results.* In our view, a steady economic backdrop paired with strong productivity trends in the U.S. should pave the way for another year of solid earnings growth in 2026, helping to support the ongoing equity bull market.

Brock Weimer, CFA;
Investment Strategy

^{Source: *FactSet 
**Bank of Canada}

Monday, 1/26/2026 p.m.

• Stocks finish mixed to begin the week – North American equity markets were mixed Monday,* with U.S. markets mostly higher while the TSX posted a modest decline, as investors await a slate of U.S. corporate earnings results to be released over the coming week. Tariffs returned to the headlines over the weekend after U.S. President Donald Trump announced that the U.S. would impose a 100% tariff on Canada if it were to pursue a free‑trade agreement with China.* Details remain unclear regarding which goods would be affected and whether CUSMA‑compliant products would be exempt. Prime Minister Mark Carney responded that Canada has no intention of seeking such an agreement with China.* While equity markets mostly took the news in stride, tariff uncertainty surfaced in markets in the form of a weaker U.S. dollar against most developed currencies and higher precious metals prices.* Additionally, reports that Japan could take coordinated action with the U.S. to stabilize the yen* also played a role in dollar weakness today, in our view. Overseas, Asian markets were mixed overnight, while European markets closed mostly higher.* Bond yields finished the day lower, with the 10‑year U.S. Treasury near 4.22% and the 10‑year GoC yield at 3.37%.*
   
• Earnings in the driver's seat — Corporate earnings will be in focus this week, with more than 90 companies in the S&P 500 scheduled to announce results, including four members of the Magnificent 7 (Apple, Microsoft, Meta, and Tesla).* Investors will likely pay close attention to whether technology company management teams expect strong AI‑related spending trends to persist over the coming months, particularly as the technology sector has lagged the S&P 500 so far in 2026.* Canadian earnings will ramp up in the coming weeks, with only 3% of TSX companies having reported thus far and estimates pointing to a solid 12% growth rate for the fourth quarter.* South of the border, fourth‑quarter earnings for the S&P 500 are expected to grow at a 7% pace, which would put full‑year earnings growth at just over 11% and mark the second consecutive year of double‑digit earnings expansion.* Looking ahead to 2026, earnings growth is expected to remain strong at nearly 15% in both the U.S. and Canada, with 10 of 11 TSX sectors and all 11 S&P 500 sectors expected to show positive growth.* In our view, broad‑based earnings growth paired with a healthy macroeconomic backdrop helps support a diversified approach to equity sector positioning. As part of our Canadian opportunistic equity sector guidance, we recommend overweight positions in the energy, industrials and materials sectors —offset by underweights to communication services, consumer discretionary, consumer staples, and technology. For U.S. stocks, we recommend overweights to consumer discretionary, health care, and industrials sectors—offset by underweights in consumer staples and utilities.
   
• Strong U.S. durable goods orders point to robust investment trends – U.S. durable goods orders for November came in well above expectations, rising 5.3% for the month versus estimates for a 1% gain, with the upside largely driven by a 98% increase in nondefense aircraft orders.* Core durable goods orders (which exclude transportation equipment) also performed well, increasing 0.5% compared to expectations for no change.* A 3.8% rise in computers and related products further suggested that AI‑related spending remained strong in the fourth quarter.* After a series of better‑than‑expected economic reports, the Atlanta Fed’s GDPNow tracker estimates fourth‑quarter real GDP at a solid 5.4%, despite disruptions from the government shutdown.* We expect healthy economic growth to continue in 2026, though likely at a somewhat slower pace than recent quarters, with U.S. GDP growth settling near 2%.

Brock Weimer, CFA;
Investment Strategy

^{Source: *FactSet 
Magnificent 7 represented by Apple, Amazon, Alphabet, Meta, Microsoft, NVIDIA and Tesla.} 

Friday, 1/23/2026 p.m.

• Stocks end volatile week on a quiet note – The TSX finished higher while major U.S. indexes were mixed after a two‑day relief rally, as concerns around the Greenland headlines faded*. Shares of Intel declined almost 17% today after the company issued softer guidance tied to ongoing manufacturing challenges*. For the week, Canadian stocks posted a modest gain, with materials, staples and energy outperforming*. U.S. small‑caps, value‑style equities, and precious metals continue to attract increased investor interest, but today the U.S. mega-cap tech stocks advanced ahead of earnings*. Elsewhere, WTI crude finished higher at $61, while government bond yields and the Canadian dollar rose*. On the economic front, Canada retail sales increased 1.3% in November, ahead of estimates, but StatCan's flash estimates suggest a 0.5% drop in December, pointing to a soft fourth quarter overall*.
   
• As geopolitical headlines ease, the focus shifts to earnings — With trade threats over Greenland now lifted, attention turns back to corporate profits, as one‑third of S&P 500 companies prepare to report fourth‑quarter results*. This week includes four of the Magnificent 7 (Meta, Microsoft, Tesla, Apple) and roughly half of the tech sector, which has lagged year‑to‑date as market leadership has broadened*. The S&P 500 is expected to deliver its 10th straight quarter of year‑over‑year earnings growth, with fourth-quarter profits projected to rise about 8%*. Encouragingly, the outlook continues to firm. Over the past six months, 2026 consensus earnings expectations have been revised higher, now pointing to nearly 15% EPS growth over 2025, with all 11 sectors contributing*. In our view, the fact that profits have accelerated without a meaningful increase in headcount highlights rising productivity.
   
• Fed is expected to hold rates steady - The first Fed meeting of the year takes place next week, and no policy change is expected, with bond markets pricing in only a 3% chance of a rate cut*. Recent economic data continue to show solid growth and steady labor‑market conditions, suggesting policymakers are comfortable pausing on rate cuts for now. The White House is expected to announce a new Fed chair soon, with Kevin Warsh or Rick Rieder reportedly the leading candidates*. Meanwhile, the Supreme Court appeared skeptical of President Trump’s attempt to remove Fed Governor Cook, with several justices expressing concern about preserving Fed independence*. This dynamic is one reason markets now expect a slightly flatter path of rate cuts, with the fed funds rate projected to end the year near 3.2% versus 3% priced in last month*. Despite the political backdrop, we believe monetary policy will remain anchored to the data. And regardless of who becomes the next chair, they will still hold just one vote on a 12‑member committee, with five votes belonging to a rotating group of regional Fed presidents chosen by their reserve banks*. These structural safeguards limit the ability of any one individual to materially shift the policy stance.

Angelo Kourkafas, CFA;
Investment Strategy

^{Source: *FactSet}

Thursday, 1/22/2026 p.m.

• Markets close higher as rebound extends – The TSX and U.S. equity markets finished higher on Thursday as the Fed's preferred PCE inflation gauge held steady at 2.8% in November, in line with expectations*. The communication and consumer discretionary sectors led gains*, signaling a risk-on tone to the trading session. Small-cap stocks added to strong gains in recent weeks and are now up 9.5% year-to-date*. Bond yields edged lower, with the 10-year Government of Canada yield at 3.40% and the 10-year U.S. Treasury yield at 4.25%*. Prime Minister Mark Carney delivered a speech yesterday to the World Economic Forum Annual Meeting in Davos, Switzerland. Carney laid out a vision for Canada to respond to a changing world order by expanding and diversifying strategic partnerships and coalitions globally to help further economic and security objectives, while leveraging what he views as the country's key values and strengths – vast reserves of energy commodities and critical minerals, a highly educated population, and a government with fiscal capacity to act decisively**. European markets also advanced after President Trump canceled proposed tariffs tied to a deal on Greenland*. The U.S. dollar declined versus major currencies*. In commodities, WTI oil pulled back amid easing geopolitical tensions*.
   
• Jobless claims rise less than expected – S. initial jobless claims increased modestly to 200,000 this past week — below expectations for 207,000 — from 199,000 the prior week*. Continuing claims, which measure the total number of people receiving benefits, declined to 1.85 million, lower than forecasts to rise to 1.89 million*. These readings remain consistent with the slow pace of layoffs in recent months, in our view. The unemployment rate stands at 4.4%, while job openings contracted to 7.1 million in November, slightly below unemployment of 7.5 million*. We expect the recent low-hiring, low-firing backdrop in the labour market to persist, helping support gradual inflation moderation.
   
• Fed's preferred inflation measure in line with estimates – Headline U.S. personal consumption expenditure (PCE) inflation held at 2.8% annualized in November, matching forecasts*. Slowly rising goods prices, up 1.4% from a year ago, have helped offset services inflation, which has also cooled but remains elevated at 3.4%*. Shelter inflation slowed to 3.3%, a key driver in moderating services inflation*. Core PCE, which excludes more-volatile food and energy prices, also held steady at 2.8%, in line with estimates*. With PCE inflation still above the Fed's 2% target, we expect the central bank to pause rate cuts for at least a few months as policymakers look for clearer evidence of easing price pressures. The stabilizing labour market should help provide some time to assess incoming data, in our view.

Brian Therien, CFA;
Investment Strategy

^{Source: *FactSet **World Economic Forum}

Wednesday, 1/21/2026 p.m.

• Markets rebound on Greenland news – Markets rallied this afternoon after President Trump announced that he was no longer intending to raise tariffs on a host of European countries after a framework for a future deal around Greenland was agreed*. This news pushed the major large cap U.S equity markets up 1.2%, clawing back more than half of yesterday's sell-off, which was the largest seen since last year's "liberation day" tariff announcements*. Bond markets also rebounded after the announcement, with the yield on the 10-year U.S government bond falling 4 basis points (0.04%) over the session*. The response in FX markets was more muted, with a small appreciation in the dollar leaving the greenback still down 0.6% against a basket of major currencies over the week so far*. Gold moved off its peak after the news, but still registered a 1.3% gain over the day with the precious metal holding on to the lion's share of its gains seen after the latest outbreak of geopolitical uncertainty. Oil prices were steady at $61 per barrel*.
   
• "A framework for a future deal" – President Trump provided little color on the agreement reached over Greenland after a meeting with NATO secretary General Rutte*. The President commented that this would be "long term" and great for the U.S and NATO but did not specify if it grants the U.S ownership of Greenland*. Earlier in the day, the President had seemingly softened his tone slightly on this topic after a tumultuous reaction from markets, ruling out the use of force to acquire Greenland and not reiterating his threat to raise tariff rates on European trade partners*. We will be watching carefully for more details from the President and NATO/European counterparts on this agreement over coming days, and how this reconciles U.S security concerns and local sovereignty.
   
• Supreme Court hears Cook case – The Supreme Court hearing on the ability of President Trump to remove Lisa Cook from her position as a Governor on the board of the Federal Reserve started today, with a number of justices seemingly critical of the administration's case*. Justice Kavanaugh warned that the President's position would "weaken if not shatter the independence of the Federal Reserve" while Justice Coney Barrett argued that the risk to financial markets of ruling in the President's favor was reason for "caution"*. Following the hearing the odds in betting markets of Lisa Cook being removed from the Fed Board this year dropped**. A ruling against the administration would limit the ability of the President to nominate a new Board member to take Lisa Cook's place, and set a precedent that the Fed was insulated against this form of political interference*.

James McCann;
Investment Strategy

^{Source: *Bloomberg **Polymarket}