A slew of positive earnings, some progress on Hormuz, and stable interest rates combined to give us a positive week on the equity markets. The bond market was virtually unchanged while oil sold off on hopes of a re-opening of the Strait of Hormuz.
| Index | Close July 30th 2026 | Close Aug. 6th 2026 |
| S&P500 | 7,458 | 7,702 |
| TSX60 | 35,506 | 36,107 |
| Canada 10 yr. Bond Yield | 3.59% | 3.62% |
| US 10 yr. Treasury Yield | 4.68% | 4.68% |
| USD/CAD | $1.40035 | $1.40165 |
| Brent Crude | $89.27 | $83.18 |
| Gold | $4,113 | $4,241 |
| Bitcoin | $64,752 | $64,442 |
Source: Trading Economics
Canada’s GDP grew by 0.3% month over month in May beating expectations. Statistics Canada is projecting a further 0.2% increase in June which would put the country’s annualized GDP growth at an annualized 3.4%. The growth was broad based with 13 of 20 sectors contributing to the growth. The standout was the mining, quarrying, and oil & gas sector which grew by 1% m-o-m. April’s results were also upgraded from 0.5% to 0.6%.
Overseas both the UK and Germany posted some better-than-expected economic numbers. In the UK it was the Services Purchasing Managers Index (PMI) that rose from 48.8 in June to 52.1 in July. A number below 50 points to a contracting economy while over 50 indicates expansion. The Manufacturing PMI contracted slightly from 52.5 in June to a still expansionary 51.9
The numbers in Germany weren’t quite so good but still better than expectations. Services PMI rose to 49.8 in July while the composite (services & manufacturing) rose to 51.3 from 49.5. Manufacturing reached a 4 year high of 52.2 in July. All of this should remind us to look past the sturm und drang of the headlines and social-media feeds. Ignore the noise, look for the signal.
Talking of sturm und drang…. Negotiations between Iran and Oman to open the Strait of Hormuz are reportedly nearing conclusion. Apparently, management of the passageway will be split between the two countries, with Iran controlling inbound traffic and Oman handling outbound traffic. No fees (if any) have been decided yet. The agreement does not have US support as it explicitly bans US and Israeli ships from using the waterway.
If the right of free passage through the Strait is impeded, it would be a violation of international law (UNCLOS) in spirit if not fact (Iran is a signatory to the Law but did not ratify it). The precedent would reach beyond the Middle East and could give other countries licence to close or control what have been international waterways.
The Democratic Republic of the Congo (DRC) has banned the export of copper and cobalt concentrates. The move is to have more of the value-added refining done in-country. The ban is immediate but allows for some special waivers. It also imposes a new tax system on mining. The DRC is the world’s largest cobalt producer and #2 producer of copper. Major mining companies directly impacted include Glencore (Switzerland) and Ivanhoe Mines (Canada). China is also a major player in the country with several of its mining companies affected.
South Korea’s KOSPI stock index has experienced a record bout of volatility this year. After rising over 364% between March 2025 and June 2026, the index has dropped by ~27%. The run up and subsequent drop is being blamed on retail investors and their use of highly leveraged products. There is nothing inherently wrong with leverage, it is after all what we use to buy a house. But like anything, you can have too much of a good thing. Most financial calamities are a result of excess leverage or borrowing. Those same calamities also create opportunities for investors who still have capacity to pick up oversold assets.
We are taking “the girls” to Parksville next week to enjoy the sea and sand. We’ll leave you with a different take on that from The Who….. enjoy!
Russ Lazaruk, RIAC, CIWM, CIM, FCSI
Managing Director & Portfolio Manager
