October 2026 - Monthly Update

Hi,

Hope this note finds you and your family well as we enjoy an extended run of summer like warm weather.

Your investment portfolio declined somewhat in September. It remains with positive performance over the last twelve months.

North American bond and stock markets declined in September.

In the United States (U.S.), the current reading for measuring activity in the services sector rose to its highest level in five years. The economic health of the services sector (which covers finance health, core transportation, hospitality, and businesses services) is the strongest it has been since the pandemic. The service sector captures two thirds of the U.S. economy and is by far the largest employer.

When the biggest part of your economy is expanding at the fastest pace in years, it stands to reason that the real economy is in a strong financial position and that trend is likely to continue.

Citing economic strength as one of the factors that contributed to the decision, the U.S. federal reserve raised overnight interest rates by one quarter of a percent. This represents the first interest rate increase in the last three years. Given the underlying strength of the U.S. economy, it would not surprise us to see another increase to U.S. overnight rates in the months ahead.

Canadian interest rates are now over 1.25% lower than U.S. rates regardless of term. From a foreign exchange and currency perspective, this manifests in a weaker Canadian dollar which in turn benefits exports which represent the largest
portion of the Canadian economy.

All told, we remain constructive on the medium-term trend for the North American economy.

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

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

“In the third quarter of 2026, several prevailing narratives – both positive and negative – moved farther and faster than expected. The script flipped (and back again, for some) on AI, central bank rate hikes, and where bond yields can go before upsetting the economic or equity-market apple cart. The AI economy is powering ahead; one day that’s great, the next it’s doom. All new technologies feature this dichotomy… Bond yields rose sharply on the back of strong economic data that coincided with a return to elevated oil prices after the collapse of the Iranian ceasefire. Global central banks could not ignore the combination. Some began raising rates and all reinforced their commitment to keeping inflation under control. This pushed the narrative around rate hikes to an extreme. Still, we’re not seeing a replay of 2022. Canadian bond yields moved from the low 3% range toward the low 4% range; U.S. Treasury yields are roughly one percentage point higher. The U.S. Federal Reserve raised rates, while the Bank of Canada remains on hold for now… Resilience remains the key theme for equities. Stocks continue to absorb higher oil prices, rising real yields and political uncertainty because global growth and corporate earnings keep surprising to the upside. The question for markets is no longer whether good things are happening. Instead, the question is whether there is too much of a good thing... It’s important to note that conditions now are different than they were in 2022. Yields are not starting from near zero, inflation is not in the high single digits, and there is no talk of stagflation... Bond yields have moved higher; that adjustment may be exactly what the global economy needs to relieve the pinch points created by its own strength… We agree that the current environment can seem confusing. Yet, no matter what happens, we are alert, vigilant and confident about the appropriate recipe for investment: stay diversified and disciplined, rebalance when/if necessary.” 

Portfolio Strategy – October 2026. BMO Capital Markets.

 

• Stocks in your portfolio that made a new 52 week high this past month: (Bank of Nova Scotia*), Johnson & Johnson*
  

• Stocks in your portfolio that made a new 52 week low this past month: (BCE*, Brookfield*, Rogers Communications*), Telus*
  

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

Thank you,

Ian, Gab, Kaitlyn, Naina, and Meeral