Tuesday, 2/10/2026 p.m.
- Stocks mixed following slowdown in U.S. consumer spending – Canadian stocks finished higher on Tuesday while U.S. equity markets were mostly lower as investors digested the U.S. December retail-sales report, which showed retail-sales growth was flat for the month, compared with expectations for a 0.4% increase.* Bonds rallied on the consumer spending report, with the 10-year U.S. Treasury yield falling to 4.14% and the 10-year GoC yield to 3.36%.* From a leadership perspective, a rally in shares of Shopify supported the technology sector of the TSX, while declining yields supported interest-rate-sensitive sectors of the S&P 500, such as real estate and utilities.* The technology, communication services, and financials sectors of the S&P 500, trailed, with the latter weighed down by brokerage stocks, which were pressured by mounting worries about AI‑related competitive pressures.* Overseas, Asian markets finished higher overnight, while European markets closed mostly lower.*
- U.S. consumer spending stalled at the end of 2025 – U.S. headline retail-sales growth was flat in December versus expectations for a monthly gain of 0.4%.* Additionally, control group retail sales (which exclude spending on autos, gas stations, and building materials) fell by 0.1% for the month, compared with expectations for a 0.4% gain.* The slowdown in spending was broad-based, with weakness notable in furniture and home furnishings stores (-0.9%), miscellaneous store retailers (-0.9%), and clothing and clothing accessories stores (-0.7%), while spending on building materials was a bright spot (+1.2%).* Despite a lackluster handoff to 2026, we expect steady consumption growth to support healthy economic momentum this year. In our view, larger refund checks stemming from tax legislation passed in 2025 should provide a modest boost to household spending power. Additionally, a cooling but stable labour market and easing monetary policy could offer further support, with our base-case calling for U.S. real GDP growth of roughly 2% in 2026.
- Busy week of economic data ahead – U.S. economic data will likely remain in focus for investors over the remainder of the week, with tomorrow bringing the January employment report and Friday the consumer price index (CPI) inflation release.* On the labour‑market front, economists expect nonfarm payrolls to rise by 75,000 and the unemployment rate to hold steady at 4.4%.* In 2025, job growth slowed to an average monthly gain of 49,000, down from 168,000 in 2024.* Despite the deceleration in hiring, there have been limited signs of increased layoffs, with the unemployment rate holding at 4.4% and initial jobless claims remaining well below their long‑run average.* Turning to inflation, expectations call for both headline and core CPI to rise by 2.5% year‑over‑year, which—if realized—would mark the lowest annual core CPI reading since March 2021.* With inflation continuing to moderate and job growth slowing, we expect the Fed to deliver another one or two interest‑rate cuts in 2026.
Brock Weimer, CFA;
Investment Strategy
Source: *FactSet
Monday, 2/9/2026 p.m.
- Markets rise ahead of updated jobs, inflation data later this week – The TSX and U.S. equity markets closed higher on Monday, with rebounding technology stocks leading gains*. Bond yields fell, with the 10-year Government of Canada yield at 3.39% and the 10-year U.S. Treasury yield at 4.20%*. In international markets, Asia finished higher overnight, led by Japan's Nikkei index, which reached a new all-time high*. The strength in Japanese stocks likely reflects reduced political uncertainty after Prime Minister Sanae Takaichi's Liberal Democratic Party secured a supermajority in the country's closely watched elections over the weekend*. In commodities, WTI oil traded higher, as flows of Russian oil to India slow, a key requirement of the recently announced U.S.-India trade deal*.
- Job growth expected to rise in January – The January U.S. jobs report, due Wednesday, is expected to show payrolls increased by 80,000*. If accurate, that would mark the strongest monthly gain in four months and exceed the 2025 average of roughly 50,000 per month*. Forecasts suggest the unemployment rate will hold steady at 4.4%*. We think the stabilizing labour market — characterized by modest hiring and limited layoffs — should give the Fed some time to assess whether inflation continues to cool. In our view, the central bank likely remains on track to cut rates once or twice this year, assuming price pressures continue to ease. We believe lower interest rates should reduce borrowing costs for consumers and businesses, helping support the economy and corporate profits.
- CPI inflation expected to cool to start the year – Headline U.S. consumer price index (CPI) inflation for January, due Friday, is expected to dip to 2.5% year-over-year, from 2.7% the prior month*. Inflation has moderated in recent months, aided by easing services inflation*. Partially offsetting that progress, goods inflation has picked up, in part due to tariffs*. We expect tariff-related price pressures to begin fading around midyear. Much of the impact reflects one-time price-level adjustments implemented in mid-2025, meaning we expect the effects should gradually roll out of year-over-year inflation comparisons.
Brian Therien, CFA;
Investment Strategy
Source: *FactSet
Friday, 2/6/2026 p.m.
- Markets roar back – Stocks rebounded strongly on Friday as dip buyers came out in force *. The S&P 500 index erased declines of as much as 1% in overnight futures trading to climb a full 2% over the session, with this surge bettered by a 2.5% gain in the Dow Jones Index, which hit a new record high above the 50,000 mark, and a 3.5% jump in the small-cap Russell 2000 index*. The swing in sentiment comes at the end of a bumpy week in stocks, particularly for some tech names, on concerns around the potential disruption from AI to software services and the eye-watering spending plans of some of the tech giants*. As risk sentiment improved, we saw bonds sell off, with the yield on the U.S. 10-year Treasury note up two basis points (0.02%) over the day*. The U.S dollar was steady against a trade-weighted basket of currencies, as was WTI oil, as investors continue to monitor geopolitical strains between the U.S. and Iran *. Gold prices and silver prices moved higher but remain well below their 2026 peaks *. In Canada, the S&P/TSX increased 1.4% over the session, despite a disappointing decline in employment in the January labour report*, although this was heavily concentrated in part-time roles, and the unemployment rate fell back to 6.5%*, blunting this negative signal somewhat, in our view.
- Amazon the latest big spender– Amazon's announcement that it plans to spend $200 billion this year on data centers, chips and other equipment was the latest eye-catching headline around AI investment*. Adding to news from Meta, Alphabet and Microsoft over recent days, this takes the total planned spending on AI-focused investment in 2026 to $650 billion across this group*. This represents a full 60% increase in spending across this group in year-over-year terms as the push to lead the AI revolution intensifies*. The scale of this investment looks to be without recent precedent, and markets are naturally becoming concerned around the size of outlay and the return on this spending*. Amazon acknowledged that capital expenditures would weigh on profitability this year, and its shares fell 10% in extended trading*. While many of the underlying fundamentals around sales growth and profitability among the mega-cap technology companies continue to look positive, the market appears to be becoming more discerning around identifying the winners and losers from this race, especially as the tremendous rates of capital-expenditure spending could make some names more asset-heavy over time, weighing on margins and valuations, in our view.
- Market rotation the big story – While tech names are rebounding this morning, the big theme of 2026 so far, in our view, remains a rotation away from some of these more expensive stocks that have led market performance over recent years. This has left the Nasdaq index trading around 1% lower year-to-date, while the Russell 2000 index is now up around 7.5% following today's surge, and while international developed-market equities are up around the 7% mark for the year*. The broadening in domestic market leadership has been supported by solid-looking economic fundamentals, with today's University of Michigan consumer sentiment survey pointing to rising confidence and lower inflation expectations in February*. Meanwhile, earnings growth is broadening across the corporate sector, with 79% of S&P 500 names beating estimates so far this earnings season, with an average upside surprise of 8.2%**. As a result, earnings growth estimates have risen to 11.4%, from 7.2% at the end of the quarter, reflecting growth across eight of the 11 sectors**. This supports our recommendation for a diverse allocation across domestic mid- and large-cap stocks, international equities, and emerging-market equities.
James McCann;
Investment Strategy
Source: *Bloomberg **FactSet
Thursday, 2/5/2026 p.m.
- Markets finish lower on continued tech weakness – The TSX and U.S. equity markets closed lower on Thursday, led by declines in materials and consumer discretionary stocks*, indicating a risk-off tone. Cryptocurrencies also traded sharply lower, with bitcoin falling below $64,000, nearly 50% off its all-time high just four months ago*. Bond yields declined, with the 10-year Government of Canada yield at 3.39% and the 10-year U.S. Treasury yield at 4.19%*. In international markets, Asian equities finished lower overnight, led to the downside by South Korea's technology-heavy Kospi index*. European markets were also down after the European Central Bank held its policy rate steady at 2.0%, as expected*. The U.S. dollar advanced versus major currencies*. In commodities, WTI oil pulled back, as the U.S. and Iran agreed to hold talks this Friday*, likely easing near-term supply concerns.
- Solid earnings season continues – Fourth-quarter earnings season is in full swing, as Magnificent 7 company Alphabet (Google) reported results after yesterday's market close that beat estimates*. However, the company's shares traded lower today after management raised its outlook for 2026 capital expenditures to $175 billion-$185 billion, well above forecasts of about $115 billion*. More broadly, earnings have been strong relative to expectations. With just over half of S&P companies having reported, 79% have beaten estimates, with an average upside surprise of 8.2%*. As a result, earnings growth estimates have risen to 11.4%, from 7.2% at the end of the quarter*. Earnings growth is expected to be broad-based as well, with eight of the 11 sectors forecast to report higher earnings*. We expect expansive earnings growth to support a broadening of market leadership. Robust profit growth is expected to accelerate through 2026, with estimates calling for a roughly 14% rise in earnings*. With valuations elevated relative to history*, we believe continued earnings growth will be a key element for further stock‑market gains. We believe opportunities in equities remain favourable, and we recommend a globally diversified approach to overweighting stocks relative to bonds. We see opportunities in U.S. large- and mid-cap stocks, developed overseas small- and mid-cap stocks, and emerging-market equities.
- Jobless claims edge higher – Initial jobless claims rose to 231,000 this past week — above expectations to hold roughly flat at 210,000*. Weekly readings can be volatile and not necessarily reflective of broader trends. Weekly jobless claims are averaging about 211,000 so far this year, still below last year's average of 226,000*. In addition, severe winter storms that affected a large area of the country in late January that disrupted business activity may have boosted claims*. Continuing claims, which measure the total number of people receiving benefits, increased to 1.84 million, in line with forecasts*. Job openings contracted to 6.5 million in December, compared with unemployment of 7.5 million*. We believe these data remain broadly consistent with the recent low-hiring, low-firing backdrop of recent months. We expect these labour-market conditions to persist in the near term, helping support gradual inflation moderation.
Brian Therien, CFA;
Investment Strategy
Source: *FactSet
Wednesday, 2/4/2026 p.m.
- Rotation away from technology continues – Equity markets were mixed on Wednesday, with the Canadian TSX positive, while the S&P 500 and technology-heavy Nasdaq were negative. From an S&P 500 sector perspective, leaders included energy and materials, while technology and communication sectors underperformed*. Markets continue to show signs of rotation, with investors moving away from tech and growth stocks, particularly AI and software names, and into more cyclical and defensive parts of the market*. Meanwhile, developed international and emerging-market equities continue to outpace U.S. and Canadian markets, with the MSCI EAFE up about 5% and MSCI EM indexes up about 9% this year in USD terms*. Precious metals were also mixed, with spot gold lower while silver was higher on the day, although both are up over 14% for the year*. In our view, investors seem to be seeking exposure to parts of the market that have better valuations and some safe-haven potential. We believe the theme of portfolio diversification, across sectors, asset classes, and regions, remains prudent for investors in the year ahead.
- U.S. ISM services data points to expansion – Following the upside surprise in the U.S. ISM Manufacturing index earlier this week, the ISM Services index also delivered solid results on Wednesday. The index came in at 53.8 for January, in line with estimates of 53.5, and indicating an expansion in the services sector*. The forward-looking new orders component also was a healthy 53.1, although slightly below forecasts of 55.0*. Overall, the U.S. economy is largely driven by the services economy, which makes up about 75% of GDP*. An ongoing expansion in the services sector, combined with a rebounding manufacturing sector, in our view, underscores that the U.S. economy remains on pace for potentially above-trend growth, with few signals of downturn or recession in the data.
- Earnings season rolls on – Earnings remain in focus this week, with more than 100 S&P 500 companies scheduled to report, headlined by Alphabet (Google) on Wednesday and Amazon on Thursday.* With nearly 48% of the index having reported, results have been strong: fourth-quarter S&P 500 earnings are now expected to grow roughly 12%, up from about 7% at the start of the year.* Technology has been a key driver, with the sector on track for nearly 30% earnings growth in the fourth quarter.* Looking to 2026, earnings growth is expected to remain healthy, with forecasts calling for more than 14% growth for the S&P 500 and positive growth in every sector except energy.* In our view, a supportive macroeconomic backdrop should help set the stage for another year of solid profit growth and positive equity-market returns. We believe opportunities in equities remain favourable, and we recommend a globally diversified approach to overweighting stocks relative to bonds. We see opportunities in U.S. large- and mid-cap stocks, developed international small- and mid-cap stocks, and emerging-market equities.
Mona Mahajan;
Investment Strategy
Source: *FactSet