September 2026 - Monthly Update

Hi,

Hope this note finds you and your family well as we return to the routines of September.

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

North American stock and bond market performance were table and positive

Last month we reviewed the path of private sector investment that set the American economy on the expansionary course that it continues today. It has produced a consistent cycle of earnings growth and reinvestment.

This path has many similarities to the current economic plan taking shape in Canada. The goal is to transition out of this period of economic stagnation into an enduing trend of growth.

Given that Canada is an export-oriented economy, much of the initial phases will be around getting goods to market and the infrastructure to support that activity. Due to the scale of these projects, the ownership, construction, operations, and funding will take the form of public/private partnerships.

While unlikely to change the path for the Canadian economy in the short term, let's reflect on a few of the elements that are in place now which would contribute to an increased likelihood of the plan working out and the positive economic outcomes that would follow over the next five years.

One powerful tailwind is the societal consensus around prioritizing the Canadian economy and this investment in the productive asset base.

Second: is that the interest rate environment in Canada is not only stable but also one of the lowest in the developed world. This is attractive for investment and economic activity.

Third: from a foreign exchange perspective, our currency is relatively weak compared to most of the major trading peers. This is attractive for investment and economic activity.

A weak job market also means that wage inflation is not a growing threat to an overall environment of price stability.

The result?

We believe there is an increased likelihood that Canada will contribute in a more positive way to the economic growth profile of North America over the next 5 to 10 years. We are becoming increasingly constructive on the investment opportunity set in Canada.

You and your wealth are in a strong and suitable position.

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

“The most significant element for equity investors is earnings growth, which was nothing short of sensational/spectacular. Earnings growth for the S&P/TSX topped 35%... For the S&P 500, earnings grew by over 52%, more than double analysts’ expectations. The sensations of the month were improving manufacturing activity, broadening earnings growth, resilient Canadian economic data, easing fears of Fed rate hikes, stronger credit conditions and ongoing AI investment. Rising global bond yields, growing fiscal concerns, elevated energy prices and renewed Canada-U.S. trade tensions, while important developments, weren’t the showstoppers that the sensationalist media made them out to be. Once again, August brought challenges. Once again, stocks and the economy remained surprisingly resilient. We continue to prefer equities over fixed income. But as bond yields rise, fixed income grows more attractive. We also continue to favour overweight positions to Canadian and U.S. equities. Canadian equities offer exposure to resources, financials and energy; U.S. equities provide access to the world’s most dynamic technology leaders… The trade news is monopolizing the public conversation in Canada. We do not want to minimize the impact on targeted industries and their communities. Then again, context is relevant and significant here. BMO Economics estimates that approximately 5% of Canadian exports are affected and roughly 0.8% of GDP is exposed. That means 99.2% of the economy is not exposed. The tariffs could shave approximately half a percentage point off GDP growth. On the other hand, growth is showing signs of strength. We enter this new phase on a decent footing, which includes the fiscal room to shelter affected workers and businesses.”"

Portfolio Strategy – September 2026. BMO Capital Markets.

 

• Stocks in your portfolio that made a new 52 week high this past month: (Bank of Nova Scotia*, Canadian Pacific KS Rail*, Manulife*), Johnson & Johnson*, S&P 500 Index
  

• Stocks in your portfolio that made a new 52 week low this past month: None
  

• The Loonie gained one cent versus the U.S. dollar to $0.72
  

Thank you,

Ian, Gab, Kaitlyn, Naina, and Meeral