Market Update

Markets have been unsettled recently as investors react to a mix of economic updates, policy decisions, and global events. Despite the noise, the overall economic picture for the next couple of years remains reasonably solid. Growth expectations for 2026 and 2027 have improved slightly, helped by lower interest rates and continued government support. That combination is providing a more supportive backdrop for markets than headlines alone might suggest.

A recent Federal Reserve leadership nomination triggered noticeable market moves. The U.S. dollar strengthened after a period of weakness, while gold and silver pulled back sharply following strong gains earlier in the year. These reactions likely reflect investors reassessing positions that had moved too far, too quickly. While precious metals may continue to see volatility, longer term factors such as government debt levels, inflation concerns, and political uncertainty could still provide support.

Geopolitical tensions remain elevated. Developments involving Iran, shifting trade relationships, and renewed focus on strategic regions like Greenland all add to uncertainty. None of these situations currently point to a clear worst-case outcome, but they do increase the likelihood of short term market swings, particularly in energy prices and currencies.

One of the more constructive signals continues to be corporate earnings. Profit expectations for 2026 and 2027 have been trending higher, and a growing number of companies are exceeding forecasts. This is not just a U.S. story. Earnings growth is expected in several regions. Strong investment in technology and productivity is helping support margins. While valuations in some markets are not cheap, the earnings backdrop remains a meaningful support for equities.

In Canada, the government has enhanced the GST credit, primarily benefiting lower income households. This may provide a modest lift to consumer spending later in the year. There is also speculation about a potential federal election, which could add some political uncertainty, though markets have not reacted meaningfully at this stage.

Overall, markets are balancing solid economic and earnings fundamentals against higher political and geopolitical risk. Volatility is likely to continue. Staying diversified and focused on long term goals remains the most effective way to navigate this environment.

February Considerations

As tax season approaches, it’s a good time to pause and ask yourself a few simple but important questions:

• Have I reviewed my realized gains and losses from last year?
• Am I making full use of my registered accounts?
• Does my income strategy still make sense given my current tax bracket?
• Are there charitable, family, or business planning opportunities I should consider before filing?
• Have there been any life changes that could affect my tax picture?

Small adjustments made early in the year can meaningfully improve long term outcomes. Tax planning is not just about filing correctly. It is about structuring intentionally.

Virtual Event

Tax-Efficient Investing: Keep More of What You Earn

Thursday, March 26th from 12:00 p.m. - 12:30 p.m 

Most investors focus on returns. The most successful focus on what they keep. Taxes quietly compound in the background and can erode growth over time.

The right planning around income and account structure can meaningfully improve long term results. Taxes are not just a fixed cost. They can be managed with intention.

Register today: https://rbcteams.webex.com/weblink/register/r38c333b44641c7b213d0e0b5172e04f1

A Final Note

If any of this raises questions for you, or if you would simply like reassurance that you are on the right track, I am here. Your financial plan should support your life, not add uncertainty to it.

Whether you are considering changes or just want to talk things through, I welcome the conversation.

Chantal

Chantal McNeily, CIM, BACS | Investment and Wealth Advisor, RBC Wealth Management | RBC Dominion Securities | T. 705-734-4409 | C. 705-794-5197 | 11 Victoria St., Suite 100, Barrie ON, L4N 6T2 | www.chantalmcneily.com