Watch video here

You've probably seen headlines about Canada's weak economic data. But before you hit the panic button, let me share what's actually happening beneath the surface.

First, the global backdrop. President Trump has signaled that a deal with Iran to reopen the Strait of Hormuz is "largely negotiated." This matters because before the conflict, that strait moved one-fifth of the world's oil. Its closure has kept energy prices elevated. While the global economy is holding up so far, energy disruptions remain a real risk to growth and inflation.

The good news? Equity markets have bounced back from March lows, fueled by strong corporate earnings and optimism around an Iran deal. Bond markets, though, are being more cautious. Yields remain elevated as investors worry whether an energy shock could keep inflation pressures firm.

Now, to Canada. Yes, GDP fell 0.1% last quarter—the second consecutive decline. Headline: technical recession. But here's the nuance. Much of that decline came from lower government defence spending after strong 2025 outlays. Business investment was soft, but equipment and intellectual property actually gained. Households kept spending—solid consumer resilience.

One more thing: Canada's population fell. That's important because it means per-person GDP actually rose 0.9%—a very different story.

Our big banks just reported solid Q2 earnings. Strong equity markets and dealmaking offset weakness in consumer lending. The real risk? Trade policy. We expect CUSMA to hold, but the review process will create headlines.

So what's the takeaway? Yes, we face real crosscurrents—Middle East tensions, trade uncertainty. But corporate earnings are providing fundamental support. 

We remain focused on keeping portfolios diversified and balanced, an approach we believe is well-suited to capture the upside while managing through the inevitable bouts of volatility that come with it. 

Thanks for tuning in and see you in two weeks.