• Stocks tick lower with geopolitical tensions back in focus – North American equity markets closed modestly lower on Monday as investors digested weekend news that Iran has again declared the Strait of Hormuz closed in response to the U.S. naval blockade of Iranian ships. The market reaction was contained, with the TSX and S&P 500 only modestly lower, which, in our view, likely reflects investor expectations that the broader trajectory of the conflict remains one of de-escalation. Further supporting this view, the Russell 2000 small-cap index traded higher on the day. Overseas, equity markets in Asia closed higher overnight, while European markets traded lower. On the economic front, domestic headline CPI rose 2.4% year-over-year in March, up from 1.8% in February, with the increase largely driven by higher gasoline prices. However, core measures of inflation remained contained. Government bond yields were little changed, with the 10-year GoC yield closing around 3.44% and the 10-year U.S. Treasury yield at 4.26%. In commodity markets, oil prices were up roughly 5% following the weekend developments, rising to around $87 per barrel.
   
• Geopolitical tensions back in focus – Geopolitical tensions returned to the forefront over the weekend following reports that Iran had again declared the Strait of Hormuz closed in response to the U.S. naval blockade of Iranian ships entering and leaving port. Despite the escalation, market reaction has been orderly, with North American equity markets modestly lower and oil prices higher, though still below $90 per barrel. Additionally, equity markets in Asia—regions that are especially sensitive to higher oil prices—closed higher overnight. In our view, this suggests that markets continue to believe the most likely path forward is de-escalation, particularly as the U.S. sends officials to the Middle East for another round of negotiations this week. In our view, markets are likely to remain sensitive to headlines surrounding the conflict in the days and weeks ahead. Even so, we believe strong corporate earnings growth and healthy economic activity should create attractive opportunities in equity markets over the balance of the year. As part of our opportunistic asset-allocation guidance, we recommend that investors take a global approach to overweighting equities relative to bonds. Specifically, we see attractive opportunities in U.S. stocks, as well as overseas developed small- and mid-cap equities and emerging-market equities.
   
• Headline inflation jumps in March; but core pressures remain contained – Domestic headline CPI rose 2.4% year-over-year in March, up from 1.8% in February. The primary driver of the increase in headline prices was gasoline, with prices rising 21.2% during the month due to the conflict in the Middle East. However, CPI excluding gasoline increased at a 2.2% annual pace in March, down from 2.4% in February. A closer look at the Bank of Canada’s preferred measures of inflation suggests that core price pressures remain contained. CPI-trim rose 2.2% year-over-year, while CPI-median was unchanged from February at 2.3%. In addition, the average of the three-month annualized changes in these two measures puts core inflation at roughly 1.6%, pointing to limited inflationary pressure in recent months. With inflation within the Bank of Canada’s target range and signs of slack in the domestic economy, we expect the central bank to remain on hold at next week’s meeting.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data: FactSet.} 

• Markets finish the week higher as Iran declares Strait of Hormuz open – The TSX and U.S. equity markets closed higher, with the S&P 500 and Nasdaq reaching new record highs as Iran announced that the Strait of Hormuz is open to commercial shipping during the 10-day Israel-Lebanon ceasefire. Consumer discretionary and industrials led the advance, as fuel-intensive sectors rebounded sharply. Bond yields moved lower, with the 10-year Government of Canada yield at 3.45% and the 10-year U.S. Treasury yield at 4.24%. Internationally, Asian markets finished lower overnight, while Europe traded higher. The U.S. dollar softened against major international currencies, consistent with a modest unwinding of safe-haven demand for the world's reserve currency amid today's risk-on tone.
   
• Oil prices pull back - In energy markets, WTI oil prices fell roughly 9% as some of the geopolitical risk premium was removed with the reopening of the Strait of Hormuz, the narrow waterway that normally handles about 20% of global oil and gas flows. While U.S. restrictions on Iranian ports remain in place, oil futures markets also retreated, now implying crude prices could move back toward the low-$70s by year-end. If realized, falling oil prices should help ease headline inflation and help reduce pressure on energy-intensive sectors.
   
• Earnings season off to a solid start – Earnings season kicked off this week on a positive note, with the six largest U.S. banks delivering better-than-expected earnings per share (EPS). More broadly, the first-quarter S&P 500 earnings outlook has improved. EPS growth has been revised up to roughly 12%, which, if achieved, would mark the sixth straight quarter of double-digit earnings growth. Technology is again expected to lead by a wide margin, with earnings gains of more than 40% year-over-year, followed by materials and financials. Importantly, the breadth of growth is expected to be strong, as eight of the 11 sectors are projected to post year-over-year EPS gains. We believe wide earnings growth should help support more balanced market performance across sectors and help strengthen the case for portfolio diversification.

Brian Therien, CFA ;
Investment Strategy

^{Source for all data: FactSet.} 

• Stocks finished mixed — North American equity markets were mixed on Thursday, with the S&P 500 and Nasdaq each closing at record highs while the TSX was modestly lower. Overseas, Asian markets advanced overnight after China reported better-than-expected first-quarter GDP, while European equities finished mixed. On the corporate front, Taiwan Semiconductor, the world’s largest semiconductor manufacturer, reported sales and earnings above expectations, citing strong AI-related demand as a key driver. Despite solid results, shares closed lower, perhaps highlighting elevated expectations. On the economic front, U.S. initial jobless claims declined to 207,000 last week, while industrial production fell 0.5% in March. Despite the monthly contraction, U.S. industrial production rose at a solid 2.4% annualized rate in the first quarter. Government bond yields were slightly higher on Thursday, with the 10-year GoC yield closing at 3.5% and the 10-year U.S. Treasury yield at 4.31%. In commodity markets, oil prices were modestly higher, with WTI crude settling around $90 per barrel.
   
• Back at all-time highs—where to next? – The S&P 500 closed above 7,000 for the first time in history Wednesday, reaching a new all-time high and fully reversing the 9% drawdown triggered by the war in Iran. The index took just 16 days from its March 30 low to reclaim record territory, as equities rebounded on a U.S.-Iran ceasefire agreement and optimism surrounding the potential resumption of oil tanker traffic through the Strait of Hormuz. Looking at similar episodes—specifically in 1986, 1997, 2000, 2007, 2020, 2024, and 2025—when the S&P 500 recovered from a pullback of at least 8% and reached a new all-time high in less than four months, history suggests that stocks have typically continued to trend higher after breaking through to new highs. On average, the S&P 500 returned 5.5% over the six months following a new all-time high in these periods.* While history offers no guarantee of future performance, we believe a healthy economic backdrop and strong earnings trends should support further equity market gains through the remainder of the year.
   
• Low U.S. jobless claims continue to signal a steady labour market – Initial jobless claims declined to 207,000 last week, down from 218,000 in the prior week and below expectations of 217,000. Year-to-date, initial claims have averaged roughly 212,000, well below the 30-year median of more than 300,000. In addition to low layoff levels, the March payrolls report indicated an improvement in job growth, with employers adding 178,000 jobs during the month and the unemployment rate declining to 4.3%. This rebound lifted the three-month average of payroll growth to 68,000, broadly in line with our expectation for payroll gains to average between 50,000 and 100,000 in 2026. In our view, stable hiring trends and low layoffs should persist throughout 2026, continuing to support household spending and broader economic activity.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data not cited: FactSet. 
Source for data cited: *FactSet, Edward Jones. S&P 500 Price Index.}  

• Markets close higher as focus shifts toward earnings – The TSX and U.S. equity markets advanced on Wednesday as investors turned their attention toward the start of earnings season. Technology and consumer discretionary stocks led gains, suggesting renewed confidence in cyclical and growth-oriented sectors. Bond yields moved higher, with the 10-year Government of Canada yield at 3.47% and the 10-year U.S. Treasury yield at 4.28%. Internationally, Asian markets rose overnight, while Europe lagged. The U.S. dollar weakened modestly against major international currencies. In energy markets, Western Canadian Select and WTI oil extended their pullback amid reports that the U.S. and Iran may pursue a second round of talks. Futures markets now imply WTI crude prices could drift back toward the mid-$70 range by year-end, which, if realized, could relieve pressure on inflation and energy-intensive sectors.
   
• Banks kick off earnings season – Bank of America and Morgan Stanley reported first-quarter results ahead of the opening bell this morning, with both beating estimates for earnings per share (EPS), offering an encouraging early read on the earnings season. Management commentary from Bank of America pointed to healthy client activity, solid consumer spending, and stable asset quality, indicating a resilient economy. First-quarter earnings for S&P 500 companies are expected to grow roughly 12.5% year-over-year, led once again by technology, followed by materials and financials. But importantly, growth is expected to be broad: eight of the 11 sectors are projected to post year-over-year EPS gains. We believe wide earnings growth should help support more balanced market performance and help strengthen the case for portfolio diversification.
   
• Import prices rise less than expected – U.S. import prices increased 0.8% in March over the prior month, coming in well below estimates for a sharper 2.5% rise. Higher prices for fuels and lubricants — up 2.9% month-over-month* — accounted for much of the increase, but outside of energy, import price pressures remained subdued. On a year-over-year basis, import prices were up 2.1%, notably below overall CPI inflation of 3.3%. This gap suggests that lower tariffs may be helping to offset elevated domestic inflation. While energy costs are likely to drive overall inflation higher over the months ahead, we think the impact will be temporary, assuming disruptions in the Strait of Hormuz are alleviated relatively soon.

Brian Therien, CFA ;
Investment Strategy

^{Source for all data not cited: FactSet. Source for data cited: *U.S. Bureau of Labor Statistics} 

• Stocks gain on better-than-expected inflation – North American equity markets traded higher Tuesday, supported by a better-than-expected U.S. producer price index (PPI) reading and generally positive earnings results from several U.S. financial services firms. The S&P 500 gained more than 1%, supported by strength in consumer discretionary and communication services sectors, while the TSX posted a 0.6% gain. Overseas, Asian markets closed higher overnight, led by a gain of more than 2% in Japan’s Nikkei, while European equities also finished broadly higher. In fixed income, government bond yields traded lower, with the 10-year GoC yield at 3.43% and the 10-year U.S. Treasury yield at 4.25%. On the geopolitical front, reports that the U.S. and Iran may hold a second round of negotiations contributed to a pullback in oil prices, with WTI crude oil closing around $92 per barrel. The U.S. dollar index also closed lower amid those developments and has retraced to just above its pre-conflict level.
   
• U.S. producer price inflation lower than feared – U.S. producer price inflation for March came in lower than expected, with headline PPI rising 0.5% for the month versus consensus expectations for a 1.1% increase. Core PPI, which excludes food and energy, rose a modest 0.1%. Encouragingly, core goods prices increased just 0.2% in March, marking the slowest monthly gain in four months and potentially signaling that tariff-related pricing pressures are beginning to ease. Services prices were also flat on the month following a string of firmer readings, pointing to broader disinflationary trends. While one month does not establish a trend, the combination of softer producer-price data and a contained core-CPI reading for March suggests that U.S. pipeline inflation pressures remain under control. Both we and the broader market expect the Fed to remain on hold at its April 29 meeting, and we believe policymakers are likely to maintain a cautious approach to any further easing. That said, if geopolitical tensions begin to fade and core inflation remains well behaved, we see scope for another Fed rate cut later in 2026 or 2027.
   
• First-quarter earnings season underway – Corporate earnings are in focus as well on Tuesday, with JPMorgan Chase, Wells Fargo, Citigroup, and BlackRock among the financial firms reporting results. While the stock reactions were mixed, headline results showed that all four companies exceeded earnings expectations. Results highlighted continued strength in market-based businesses, particularly trading and investment banking, which provided a meaningful boost to performance across the group. Additionally, BlackRock cited record ETF inflows as a catalyst for the quarter. While some commentary suggested a more cautious outlook for net interest income, capital-markets activity appears to be on strong footing. At an index level, despite the war in Iran, earnings estimates have held up well. Consensus currently calls for S&P 500 earnings growth of more than 10% in the first quarter and 17% for the full year. We believe that full-year forecast may prove overly optimistic, especially if higher energy prices weigh on corporate profit margins. Still, we think steady labour-market conditions, resilient economic activity, and strong AI-related investment should help support another year of healthy earnings growth and help provide a constructive backdrop for equities over the balance of the year.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data: FactSet}