July 2026 - Your Monthly Update

Hi,

Hope this note finds you and your family well as the summer takes shape.

 

Your investment portfolio posted gains again in June. It remains with positive performance over the last twelve months.

 

After a couple of months of gains, North American investment markets were flat in June with exception of stock indices in the United States (U.S.) which were negative lead by declines in the technology sector.

 

Taking the forest for the trees, the medium-term trend for the U.S. economy is one of broad-based economic growth. Let's go back to the origins of this trend for context on where we are today and perspective on the next few years.

 

One can trace the inception of this underlying cycle of economic growth to the beginning of the pandemic and China's zero covid policy. From an economic perspective, this policy led to the supply chain breakdown and inflationary spike of 2021/2022.

 

In response, the U.S. private sector began the trend of re-shoring manufacturing capacity and supply chain to the domestic continent.

 

This investment to refresh the U.S. industrial base didn't end with the manufacturing sector. It expanded to include a whole host of secondary and tertiary industries such as transportation/ logistics, power generation / transition, healthcare and, more recently, AI data centres.

 

The work is not done.

 

Present data reflects clear and projectable back logs of work spanning several more years. This translates into future economic activity. We remain constructive on the medium-term trend of economic growth by the US economy.

 

What’s more, the data over the last nine to twelve months also reflect the emergence of a new medium-term trend. That is, the transition of benefit to the real economy because of these productive investments to the infrastructure or the plumbing of the US economy. This aligns with the better-than-expected earnings and operating environments being reported by the private sector, and more importantly, the continued rollout of new products, services and innovation into the real economy.

 

Our investment strategy is steady and unchanged. We continue to focus on businesses with exposure to the domestic North American economy. You and your wealth are in a strong position.

 

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

“The first half of 2026 was a tug of war between disruptive shocks and durable underlying trends. Markets were repeatedly tested by geopolitical tensions, policy uncertainty and an inflation scare. Throughout and despite this period of upheaval, the global economy remains resilient and adaptable – demonstrating yet again its capacity to deal with the blows... Growth has prevailed based on global fiscal largesse, durable consumer spending, and very strong corporate capital spending that is anchored in the artificial intelligence race but also supported by broader capex strength… Capital markets continue to deliver important feedback to policymakers that helps ameliorate, if not resolve, the problems created. In the first half of the year, this feedback prompted several notable course corrections. Rising borrowing costs for the Japanese government (tied to January’s election-driven fiscal expectations) led policymakers to walk back profligate spending plans. U.S. geopolitical developments in Venezuela and rhetoric directed at Greenland, along with further threats to the independence of the U.S. central bank, prompted a sharp selloff of the U.S. dollar and a parabolic rise in the price of gold. By June’s G7 Summit there was no mention of Greenland. The appointment of Kevin Warsh as Fed Chair and his surprisingly less-dovish views quieted fears about the central bank’s independence. The result: a one-year high for the U.S. Dollar Index and a 25% decline for the price of gold…. Rising oil prices provided two pieces of important feedback. The sharp move higher in spot prices delivered near-term pain to both sides: no revenue for Iran and inflation for America. These factors eventually drove the adversaries to the bargaining table. All the while, prices in oil futures markets stayed roughly in the US$70 range, signalling to investors that the spike in near-term oil prices would rise to whatever painful level was necessary to motivate negotiations… AI buildout is a positive driver of activity, but concerns remain around overinvestment, large initial public offerings, bond issuance, job displacement, and disruption of incumbent technology and software businesses. The transition will bring challenges and opportunities, transforming some industries and jobs while creating new ones. Past technological innovations have featured this powerful and historically positive creative destruction – not apocalypse... When hyperscalers are under the microscope because of their spending, that’s healthy and suggests investor discipline; it’s not the unbridled enthusiasm typically associated with a bubble.."

Portfolio Strategy – July 2026. BMO Capital Markets.

 

• Stocks in your portfolio that made a new 52 week high this past month: Canadian National Rail*, Emera*, Fortis*, Johnson & Johnson*, Morgan Stanley*, Royal Bank*, S&P500 Index, TD Bank*, & United Health*

• Stocks in your portfolio that made a new 52 week low this past month: Mastercard*, Microsoft*, Telus*

• The Loonie declined two and a half cents versus the U.S. dollar to $0.70

 

Thank you,

Ian, Gab, Kaitlyn, Naina, and Meeral