The current President of the United States (US), Donald Trump, is in his second term and as President he confirms the well-known investment saying that “markets climb a wall of worry.”
No President in modern time has been as confrontational on a global scale as President Trump, even within his own country. Yet, as a whole stock markets have moved higher under his presidency, in his first term and now his second term. The reason appears to be his push for lower taxes, less business regulations and a very pro-American agenda. Currently, these factors offset the turbulence that often follows President Trump.
The big question on investors’ minds is, can this continue? The answer comes down to two key factors: will the US economy continue to show decent growth and will inflation stay under control. The economic importance is that a weakening economy leads to higher unemployment, possibly a recession, and therefore most likely lower corporate earnings, a major component of the stock market. So far, the US economy is performing well, and I see this continuing for at least the rest of 2026. The Canadian economy is weaker than the US, but Canada is showing some signs of decent growth as the demand for commodities continues to grow.
The other factor, inflation outlook, is important because it will dictate which direction interest rates go. If inflation takes hold like it did a few years ago, interest rates would likely rise to bring inflation back under control. To see the negative effects of higher interest rates, all we have to do is look at bond and stock markets in 2022 which had negative rates of return.
What I expect to happen over the next six to twelve months is that global economic growth will be decent and inflation should peak and slowly move lower as the US/Israel/Iran conflict is settled and commodities start to move more freely again. I expect stocks to slowly move higher and interest rates to remain stable.
Best regards,
Bill Achtymichuk, CIM®, FCSI®, CFP®
Portfolio Manager / Senior Wealth Advisor
iA Private Wealth | Active Wealth Partners
Insurance Advisor| iA Private Wealth Insurance*
5470 Calgary Trail NW, Suite 202
Edmonton AB, T6H 4J8
T: 780-944-2690
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bachtymichuk@activewealthpartners.com
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