It was a week of headlines and angst with not a lot of market reaction. Equity markets were up on both sides of the 49th parallel, bond yields virtually unchanged, with gold and bitcoin both higher. The Canadian dollar was a bit weaker while oil sold off early in the week before rebounding in the past few days.
| Index | Close Aug. 20th 2026 | Close Aug. 27th 2026 |
| S&P500 | 7,646 | 7,720 |
| TSX60 | 36,365 | 36,834 |
| Canada 10 yr. Bond Yield | 3.76% | 3.71% |
| US 10 yr. Treasury Yield | 4.71% | 4.68% |
| USD/CAD | $1.37934 | $1.38546 |
| Brent Crude | $93.47 | $89.48 |
| Gold | $4,527 | $4,601 |
| Bitcoin | $72,708 | $80,010 |
Source: Trading Economics
The big story this week is, of course, the collapse of trade talks between Canada and the US. The collapse has been well covered in the press and on social media. It has now devolved into a war of words, accusations and counteraccusations by both sides. The poison pill(s) in the final proposal were constraints on Canada’s sovereignty, specifically language rights, the ability to negotiate trade agreements with other countries, and a requirement to match US tariffs on other countries. In the end, no one wins a trade war.
Inflation, as measured by the Personal Consumption Expenditures Index (PCE), rose in the US in July to 3.7%. Consensus had expected a 3.6% reading. Core PCE, which excludes food and energy, was a more moderate 3.3%. However, both numbers are well above the Federal Reserves 2% target. While the Fed does not appear in a rush to raise rates, this reading does put some pressure on them to act.
The Jackson Hole Conference, aka Burning Man for Central Bankers, takes place this week. The headline act will be US Fed Chair Kevin Warsh on Friday. Warsh has been very opaque in his comments to date and investors are looking for any indication of future interest rates. His opening act, 3 of the Federal Reserve Governors, were less circumspect in their comments pointing to persistently high inflation. Beth Hammack, the Cleveland Federal Reserve president, called for higher rates now, saying it was time to act.
US Treasury Secretary Scott Bessent rolled out “Operation Outcast” on Monday. The objective is to further isolate Iran from the rest of the world by targeting companies or countries that continue to do business with Iran. No specific sanctions have been levied yet and China has pushed back against the threat. Bessent expects to sanction one major financial institution by the end of the week.
Oil sold off earlier this week on hopes that a deal between Oman and Iran to open the Strait of Hormuz would come to fruition. Talks were extended to include Qatar, and the framework of an agreement appeared to be in place. Unfortunately, the US has not been involved in this round of talks so it may all be moot.
In company news, earnings at the Canadian banks came in above expectations for the 3rd quarter. Performance was driven across multiple business lines including corporate finance, investment banking, and wealth management.
Facebook parent company, Meta, has been fined up to $18 billion in a case brought by several states accusing the company of designing apps to be addictive to children. The settlement was reached during a California federal trial. Meta denied wrongdoing but agreed to settle.
This next item is a bit lot tech nerdy. Husband and wife team, Benedikt Jenik and Anima Anandkumar, have built an AI model that processed 5 trillion data points in one prompt. That is 5 million times what the flagship models of Anthropic or Google typically handle. The model uses neural operators rather than the Transformer architecture behind Large Language Models (LLMs) such as ChatGPT. LLMs learn to guess the next word, this one learns to guess what physical reality does next. The California based couple had previously turned down an offer from Jeff Bezos to lead his Prometheus project to build their own company and technology.
We lost Dolly Parton to cancer this week. Singer, composer, actress, entrepreneur, and philanthropist she was an icon and role model to millions around the world. Hers was truly a rags to riches story. We’ll leave you with this
Russ Lazaruk, RIAC, CIWM, CIM, FCSI
Managing Director & Portfolio Manager
