Most markets were essentially flat this week despite the usual md-week volatility. Both the S&P500 and the TSX finished modestly higher. Bond yields were virtually unchanged while the Canadian dollar was lower. The dollar story is more one of USD strength than CAD weakness. Oil trended higher during the week before settling back on Thursday on hopes delusions of a deal to open Hormuz. The big loser of the week was Bitcoin.
| Index | Close May 28th 2026 | Close June 4th 2026 |
| S&P500 | 7,570 | 7,575 |
| TSX60 | 34,518 | 35,232 |
| Canada 10 yr. Bond Yield | 3.44% | 3.44% |
| US 10 yr. Treasury Yield | 4.46% | 4.48% |
| USD/CAD | $1.37817 | $1.39086 |
| Brent Crude | $94.20 | $95.14 |
| Gold | $4,498 | $4,475 |
| Bitcoin | $73,367 | $63,565 |
Source: Trading Economics & Factset
Canada’s economy remained stagnant in the 1st quarter of 2026. GDP declined 0.1% in the quarter which followed a 1% decline in the 4th quarter of 2025. Politicians are quick to call it a recession while most economists aren’t so sure. In any case it does point to the underlying weaknesses in the Canadian economy. Factors include lower immigration, the trade war, which in turn has slowed business investment. If there is a silver lining, it’s that it will keep interest rate hikes off the table.
Meanwhile, in Europe rate hikes are very much on the table after the latest inflation report. Both headline inflation (3.2%) and core (2.5%) came in higher than expectations and much higher than the ECB’s target of 2%. There was a lot a variation amongst the countries. Bulgaria had the highest rate at 6.3% while Germany’s rate cooled to 2.7% down from 2.9% in the prior month.
In the US, the latest Job Openings and Labour Turnover Survey (JOLTS) showed a jump in job openings from 6.887 million in March to 7.618 million in April. The increase in openings was largely driven by professional and business services. Employers are being picky though, with actual new hires still sluggish. Workers are being just as cautious with the voluntary quits falling to their lowest level in 6 years. From a monetary policy perspective, this is another case against any rate cuts, though not an overarching reason to raise rates.
The Federal Government rolled out its new AI strategy this week. The plan focuses on job creation, sovereignty, and increased AI adoption. What it lacks are details on how it will protect Canadians from some of the adverse effects of the technology. Despite any flaws in the strategy, Canada does have an AI adoption gap with only 12% of businesses using AI between 2024 to 2025. That number has risen to 14.5% but we rank 44 out of 47 countries on AI literacy and training. While the downsides of the technology can not be brushed aside, AI is here to stay and can/will be a productivity enhancer for those companies that learn to use it and implement it wisely.
Who would have thought the Trump administration would adopt a core principle of ESG? This week they announced they would apply a 10%-12.5% global on 60 trading partners (including Canada, the EU, the UK, China & India) for failing to curb imports made with forced labour. Forced labour is a scourge and screening for it falls under the “S” (social) of ESG integration in portfolio management. Using it as an excuse to impose blanket tariffs is a fig-leaf to justify tariffs that may not otherwise survive a court challenge. It’s no different than the fentanyl excuse used against Canada last year.
CUSMA (USMCA if you’re not from Canada) trade negotiations are getting real. The US is following their previous tactic of negotiating separately with Canada and Mexico. Canada–US Trade Minister Dominic Leblanc was in Washington this week with our chief trade negotiator Janice Charette. While there they met with US Trade Representative Jameison Greer in what Leblanc described as positive meetings. Canada also gave formal notice that we would like to renew the agreement for 16 years. If the agreement is not renewed, it will be reviewed annually. We are still early in this game.
It is going to be a huge year for the tech sector and maybe more so for Wall Street. We have 3 gigantic initial public offerings (IPOs) of stock coming to market plus an $85 billion secondary equity offering from Alphabet (Google). SpaceX (Elon Musk), OpenAI (ChatGPT), and Anthropic (Claude AI) will make their stock market debuts with SpaceX leading the charge next week with ~$75 billion being offered to the public at an expected $135 per share. This gives the company (which does not generate a profit) a $1.77 Trillion valuation. All 3 companies will be included in the various market indices (although at different times) which will force funds & ETFs that track the indices to buy them. That buying pressure will cause some market dislocation as other holdings will need to be sold to accommodate the newcomers.
With all the turmoil in the world it sometime seems like we are riding out an interminable storm. Which is the inspiration for this week’s choice from the Doors…. Enjoy
Russ Lazaruk, RIAC, CIWM, CIM, FCSI
Managing Director & Portfolio Manager
