Market Outlook – December 2025

As we step into 2026, the outlook for both U.S. and Canadian markets remains encouraging. The U.S. is regaining its position as a global market leader, with corporate earnings continuing to impress and GDP momentum significantly outpacing Canada. Early indicators suggest that U.S. companies are well-positioned to deliver strong results in the first quarter, supported by robust consumer demand, ongoing innovation in technology and AI, and a healthy labor market.

In Canada, while economic growth is expected to be steady, the pace may trail that of the U.S. due to softer GDP forecasts and ongoing global trade uncertainties. However, Canadian equities—especially in financials, energy, and materials—remain resilient, and the TSX continues to benefit from its resource-rich sector exposure. The first quarter should see continued strength in these areas, with opportunities for selective growth as the year unfolds.

After three consecutive years of double-digit returns, we expect 2026 to bring more normalized, moderate market gains. In this environment, dividends are likely to play a larger role in total portfolio returns, providing stability and income alongside capital appreciation. Preliminary forecasts for 2026 point to further upside, with the S&P 500 potentially targeting new highs in the 7,200–7,600 range and the TSX aiming for the 32,500–34,500 range. We’ll confirm these figures as our research is finalized, but the positive momentum and thoughtful positioning in the portfolio provide a strong foundation for the year ahead. As always, we remain focused on risk management and diversification, confident that our approach will help navigate opportunities and challenges in the months to come.

If you would like to receive a full copy of the December 2025 market commentary, please email us at msbwealth@nbpcd.com