Global Index Performance

Indices	Month-to-date on July 31 2026	Year-to-date on July 31 2026
Canadian Bonds1	-1.55%	0.66%
Canadian Large Cap Equities2	1.22%	12.52%
U.S. Large Cap Equities3	-1.18%	12.49%
Developed Market Equities4	0.82%	14.62%
Emerging Market Equities5	-4.11%	23.09%

Source: FactSet as of August 12, 2026.

Fixed Income & Economic Update*

The Bank of Canada held its overnight rate at 2.25% on July 15th, a sixth consecutive hold. Policymakers noted that growth had been subdued over the past year as the economy adjusted to new tariffs, elevated geopolitical uncertainty and slower population growth. Despite higher energy prices stemming from the conflict in the Middle East, economic indicators suggest Canada's economy has regained momentum in recent months. GDP growth has been supported by resilient consumer spending, stabilizing housing activity and a rebound in exports. Labour market conditions have remained soft, with unemployment at 6.5% in June, reflecting continued excess capacity. Canadian bonds weakened as yields moved higher, with the Canadian bond universe declining 1.6%. South of the border, the Federal Reserve held its policy rate at 3.50%–3.75% on July 29th. The Fed continued to characterize economic activity as expanding at a solid pace, supported by strong productivity and capital investment, while acknowledging inflation remains above its 2% target, reflecting energy-related supply pressures.

Equities* 

Canadian equities, as measured by the S&P/TSX Composite, gained 1.2% in July and 12.5% year to date, led by energy and financials as higher oil prices supported producers. In the U.S., large-cap equities declined as a pullback in technology and AI-related shares offset strength in energy and financials. Investors appeared increasingly focused on whether AI-related capital spending will translate into sufficient future returns, particularly given elevated technology sector valuations. Corporate fundamentals nonetheless remained supportive, with earnings growth tracking its strongest pace since 2021 and earnings estimates revised higher in recent months. Outside North America, developed-market equities gained 0.8% in July, benefiting from lighter exposure to mega-cap technology. Emerging-market equities declined after an exceptional run earlier in the year, with weakness concentrated in semiconductor-heavy South Korea and Taiwan. Profit-taking in technology shares and a broad semiconductor correction weighed on returns following strong gains earlier in the year. Despite July's pullback, emerging markets remained the strongest-performing major equity category year to date at 23%.

 

Broad Market Overview & Outlook

In our view, July illustrated an environment where the global economy remains resilient, but markets have become increasingly selective, placing greater emphasis on earnings delivery and the sustainability of future growth. Consumer spending held up well and labour markets remained broadly supportive, while persistent inflation pressures, elevated oil prices, higher long-term rates and geopolitical uncertainty raised the hurdle for returns. One constructive development was the broadening of market leadership beyond U.S. mega-cap technology, with energy, financials and international markets picking up the slack.

In our view, ongloing develpments in the Middle East remain a significant source of market risk. A ceasefire and June truce between the U.S. and Iran broke down in July. Continued disruptions affecting the Strait of Hormuz have increased uncertainty regarding the outlook for inflation and monetary policy. The commencement of the CUSMA review process serves as a reminder that trade-related uncertainty remains an important consideration for investors. In our view, diversification across asset classes, sectors, and regions remains an important risk-management consideration in the current environment. Higher bond yields may provide investors with enhanced income opportunities relative to recent years. With fundamentals still relatively healthy but valuations elevated in some areas, future returns may increasingly depend on earnings quality, balance sheet strength, and disciplined portfolio construction.

*Data sourced from FactSet as of August 12, 2026. 

 

 

 

1. As measured by the FTSE Canada Bond Universe Index
2. As measured by the S&P/TSX Composite Total Return Index
3. As measured by the S&P 500 Total Return Index in CAD
4. As measured by the MSCI EAFE Total Return Index in CAD
5. As measured by the MSCI EM Total Return Index in CAD