March 2026 - Your Monthly Update

Hi,

 

Hope this note finds you and your family well as we begin to welcome spring.

 

Your investment portfolio gained in February and is showing a slight decrease over the last twelve months.

 

Energy prices are front and centre in economic headlines. The key number refers to the spot or overnight price of oil.

The futures market is where industrial users of energy (the private sector) shop.

 

Here the price is set for delivery of energy at a time in the future. The rates on forecasted purchases are significantly below the current price of oil. For example, oil set for delivery twelve months from now is USD $75 a barrel (USD$90-$95 presently).

 

The point is not that one is data point is right and one is wrong. It is that short-term prices are more volatile and futures often better reflect the more prevalent trends in the medium term.

 

The Institute of Supply Management (ISM) Services Index is a leading economic indicator measuring the performance of the U.S. service sector. In February, this index registered the highest expansionary reading since in four years. The increase was led by all major subcomponents: business activity, new orders, and new export orders.

 

With manufacturing also expanding in the first two months of the year, the U.S. economy is showing renewed resilience that translates to continued economic growth. The current cycle of investment in the productive asset base of the North American economy is a planned action spanning years not weeks.

 

Our long-term strategy remains unchanged. Continue to focus on established, profitable businesses central to the domestic North American economy. These areas remain fundamentally strong and stable as evidenced by their increasing dividends, record levels of cash on balance sheets and best in class leadership.

 

You and your investment portfolio are well positioned for the future.

 

The view from Brent Joyce, BMO Wealth’s Chief Investment Strategist:

"Capital markets have a long history of looking past geopolitical events. An initial, swift risk-off reaction is often followed by a recovery when investors return their focus to fundamentals and ask what the medium- to longer-term impact might be on global growth, corporate earnings, inflation, and interest rates. This reaction function is getting milder and shorter, which reflects the increasing frequency of geopolitical upheavals and surprises in recent years…. Intraday price action that starts on the manic side eventually gives way to what we might call the “gravitational pull” of the constructive fundamental backdrop for growth, corporate earnings, inflation, central bank policy, and bond yields that predated the conflict – and will likely continue post-conflict… Capital markets have handled many challenges over the last 18 months. We expect that the current situation will follow a similar path. We believe economic expansion remains intact, and after the near-term volatility, the equity bull market will resume.

 

The global economy is buoyed by reasonable levels of inflation, supportive financial conditions, decreased trade uncertainty, productivity gains, fiscal stimulus and upgrades to corporate earnings, plus capital expenditures in AI, defence and infrastructure, and signs that employment, manufacturing, and housing activity are exiting their recent soft patch. The energy shock is the external force; however, we don’t believe it’s capable of knocking the global economy off its path. Our upside growth scenario could be dented by a prolonged conflict that restrains access to global energy supplies; even here, we don’t see derailment. If we get a reasonably quick stasis, it will reinforce our view that global economies are set for solid growth in the year ahead, which will take equity markets to new highs.”

 

• Stocks in your portfolio that made a new 52 week high this past month: Canadian National Rail*, Fortis*, Johnson & Johnson, TD Bank*, Waste Management*

• Stocks in your portfolio that made a new 52 week low this past month: Thomson Reuters*

• The Loonie was unchanged versus the U.S. dollar to $0.735

 

Thank you,

Ian, Gab, Kaitlyn, Naina, and Meeral