Equity markets advanced modestly this week despite volatility mid week. The 10 yr. bond yield changed by a few basis points, but the 30 yr. Treasury yield reach a 17 yr. high. While down from last week’s highs, oil reacted to renewed conflict in the Middle East.
| Index | Close July 23rd 2026 | Close July 30th 2026 |
| S&P500 | 7,413 | 7,458 |
| TSX60 | 35,163 | 35,506 |
| Canada 10 yr. Bond Yield | 3.65% | 3.59% |
| US 10 yr. Treasury Yield | 4.70% | 4.68% |
| USD/CAD | $1.40809 | $1.40035 |
| Brent Crude | $100.48 | $89.27 |
| Gold | $4,050 | $4,113 |
| Bitcoin | $65,102 | $64,752 |
Source: Trading Economics
The US Federal Reserve chose to hold rates steady this week, but the tone was more hawkish than expected. 3 of the 12 voting members voted against holding rates steady, arguing that inflation had run too high for too long. In another departure the official post-meeting press release was shorter with less detail or colour than markets are used to.
US inflation as measured by the Personal Consumption Index (PCE) was modestly lower in June giving the Fed a bit of cover for their decision to hold rates steady. The 3.7% reading is still well above the Fed’s 2% target. The lower reading was largely a result of lower fuel costs while the “cease-fire” in the Middle East was in effect. That short-lived reprieve has disappeared.
US economic growth slowed in the 2nd quarter, falling to 1.5% from Q1’s 2.1%. A widening trade deficit and higher fuel prices contributed to the downturn. It was not all gloom though as consumer spending picked up and investment in AI continued apace.
Looking abroad, the Eurozone delivered better than expected GDP growth. The growth wasn’t evenly spread around. Ireland, Lithuania, and Sweden led while Belgium and Austria stagnated. The continent’s largest economies, Germany, France and Italy all expanded but at a very modest 0.2% quarter over quarter.
The Bank of England opted to hold the line on interest rates for now. Like the US, there was dissent with 3 members of the Monetary Policy Committee (MPC) voting for an increase in rates. London based traders are more inclined to bet on a rate hike despite BoE Governor Andrew Bailey playing down the possibility.
This is not a game changer yet but is an indication of things to come. China has begun manufacturing its domestically developed immersion deep ultra-violet lithography machines. This is a key chip-making tool long dominated by Holland’s ASML. It is another indication of China’s drive to reduce its dependence on western technology. It is early days yet and China is expected to develop its next generation of extreme ultra-violet lithography machines with one now in the proto-type stage.
Shares in China’s biggest memory chip maker, ChangXin Memory Technologies (CXMT) soared by 470% after their IPO on the Shanghai Stock Exchange. The surge pushed CXMT’s market valuation to $487 billion making it the most valuable publicly traded company in China. The company manufactures dynamic random-access memory chips (DRAM) used in everything from phones to AI data centres. If you’re keeping score, SpaceX is now trading below its IPO price.
Will the US face a natural gas shortage? In this YouTube interview, energy analyst Matt Smith says that is entirely possible by 2028. His thesis is that demand, powered by LNG exports and domestic power generation needs (AI data centres) will outstrip the industry’s ability to deliver. The supply issue is partly a factor of finite quantities but also pipeline networks that lack capacity or reach.
It’s the BC Day long weekend, so we’ll close off with this from Spirit of the West….. enjoy
Russ Lazaruk, RIAC, CIWM, CIM, FCSI
Managing Director & Portfolio Manager
