Good morning,

Markets are navigating a mix of shifting central bank signals, strong equity momentum, and ongoing geopolitical noise (especially around energy). The result? More uncertainty but also continued opportunity.

The U.S. Federal Reserve is sounding more cautious again, with a slightly more “hawkish” tone and growing debate internally about the path of rates . At the same time, a new Fed chair is expected soon, which could gradually change how clearly (or not) the Fed communicates with markets. We interpret this to mean the potential for more volatility in interest rates - especially longer-term yields.

Meanwhile, equities have continued to climb, with the S&P 500 hitting new highs and earnings coming in strong - particularly in technology and AI-related names . That said, not all sectors are participating equally, and energy markets remain a key factor with ongoing tensions in the Middle East pushing oil prices higher.

Potential portfolio implications include:

• Interest rates – yields have increased, and we may find ourselves in a “higher-for-longer” reality. Less clarity from central banks (ie. US Fed), coupled with continued inflationary concerns with the Iranian strife, could lead to more movement in bond yields - especially longer-term bonds.

• Equities - momentum remains strong (especially in technology/AI), but leadership is narrow. Diversification across sectors remains important, as is active security selection in identifying and managing risk.

• Energy - rising oil prices (up sharply this week) could keep inflation pressures alive, which may delay rate cuts and create short-term market swings.

• Fixed income - bonds are offering more attractive yields, but price volatility may persist as markets adjust to shifting rate expectations. In the long term, higher bond yields provide not only a higher income base for portfolios, but also a better cushion against volatility.

This is one of those environments where headlines can feel overwhelming - however markets are still functioning well beneath the surface. Staying invested, diversified, and focused on long-term positioning continues to be the most effective approach, even if the day-to-day noise tries to convince otherwise.

Please click here to access this week’s Global Insight Weekly where I have highlighted what I consider interesting/important takeaways.