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Hello everyone, and welcome to the weekly roundup. Today we’ll discuss macroeconomic developments, precious metals, and earnings releases. Ben and Eva greet each other and note that much has changed over the past week, setting the stage for a discussion that could easily last an hour.

The conversation begins with Kevin Walsh emerging as a potential nominee for the new Fed chair. The group considers what his leadership could mean for future interest rates. Ben notes that Walsh’s official nomination fueled the recent correction in the silver and precious metals market, acting as a catalyst. Although it’s uncertain if Walsh alone caused the change, his announcement was widely cited as a major factor. Market participants have interpreted Walsh as being more hawkish than expected, suggesting rates may not be cut quickly and that quantitative tightening could persist. Ben adds that Trump’s team likely vetted Walsh thoroughly before the nomination, with two schools of thought emerging: either Walsh continues his historically hawkish approach, providing Trump with a market scapegoat if needed, or, more likely, Walsh supports cutting interest rates and flattening the yield curve to stimulate the economy. Given Trump’s recent statements about accelerating housing, Ben expects Walsh will align with political needs and possibly advocate for lower long-term rates.

Turning to macroeconomic indicators, Canada’s services PMI points to a deepening downturn. Ben explains that this typically signals rising unemployment and a weakening jobs market. Despite these trends, he’s surprised that more interest rate cuts haven’t been priced into the Canadian market. Most bank economists forecast no changes until Q4, but the combination of rising unemployment, falling inflation, and declining PMIs suggests an economic slowdown and potential rate cuts. The Canadian market performed well last year, largely due to financials and gold, but Ben predicts this momentum may not continue and expects further signs of a slowing economy and falling interest rates.

The discussion then shifts to precious metals, which experienced a frenzy on Friday. Ben attributes the volatility to several factors, highlighting that technical indicators were overextended and signalled a sell-off. Despite the dramatic moves, the fundamental case for precious metals remains unchanged. Currency instability and shifting central bank policies still support a bullish outlook for gold and silver, but recent events have been driven by technical factors, leading to massive selling pressure and margin calls, especially among highly leveraged hedge funds. This liquidity flush affected not just metals, but also AI, tech, and crypto markets. Ben’s strategy involved reducing exposure to precious metals, locking in gains, and waiting for the market to stabilize and rebuild a technical base. He advises monitoring charts closely, noting that rebuilding will be volatile and painful for investors holding positions.

On the technology front, Anthropic’s latest AI tool is drawing significant attention, potentially disrupting the space. However, Ben observes that poor timing—coupled with the overall market liquidity flush—has negatively impacted major players like Microsoft, Google, Nvidia, ARM, and AMD. The release of Anthropic’s product and broader liquidity issues have created selling pressure, but Ben sees opportunities to deploy cash and add positions as the market reacts. He does not believe that AI or tech is finished; instead, these sectors will likely recover and rally when market conditions improve.

As earnings season continues, Ben notes that market reactions have become more sensitive. Announcements that would have previously led to stock rallies—such as Google’s increased investment in AI—are now met with declines. Marginal misses, like Estee Lauder’s recent results, have led to sharp stock drops, reflecting a tendency for overreaction and creating potential buying opportunities. Ben contrasts this quarter’s volatility with previous periods of strong forward guidance and positive momentum.

Technical issues briefly interrupt the discussion, but Ben returns to provide an update on market developments as of February 5th. He emphasizes that opinions shared do not necessarily reflect those of Nash Mic Financial, and encourages viewers to consult their advisers regarding risk tolerance and personal financial goals. The global landscape is marked by heightened political tensions and increased crude oil production, with the US becoming a major producer alongside Russia, Saudi Arabia, Canada, Iran, UAE, and Venezuela. Ben points out that despite rising production, oil prices have remained flat, and Venezuela may have the most potential for further increases.

Precious metals, especially gold, have become heavyweight sectors in the TSX, contributing to both last year’s strong performance and current downward pressure. Ben anticipates a rotation from materials to energy and financials, with some movement out of financials as well. He examines sector breakdowns and notes that technical overextensions have led to significant corrections. With rising unemployment, falling inflation, and declining PMIs, Ben expects rate cuts to be announced, possibly at the March meeting, and recommends some bond market exposure as corrections have not yet been fully priced in.

Looking ahead to next week, Ben advises monitoring market normalization, particularly the gap between ETF net asset values and market prices—highlighting the SLV silver ETF trading at a significant discount. As the gap closes, it may signal stabilization. The team will look to deploy capital into areas hit hardest over the past weeks, seeking opportunities to capitalize on recent downturns.

Eva closes by reminding viewers to subscribe and follow on YouTube and LinkedIn at Heart Investment Group, and to access daily financial updates via the video caption. Clients are encouraged to reach out with questions or to book review meetings. The team thanks everyone for listening and wishes them a pleasant day.

Hello everyone, and thank you for joining us for the Heart Investment Group's 2026 Annual Outlook. We're excited to have you here as Ben shares his perspectives for the coming year, offering insights on markets, geopolitics, and the global economy. Before we begin, a few quick housekeeping notes: if you have any questions or comments, feel free to add them to the Q&A box at the top. Either of us will keep an eye out for your queries. If you’re unable to stay for the whole session or would like to revisit it later, the recording will be uploaded to our YouTube page at Heart Investment Group within a day or two.

Let’s get started with Ben Hart’s annual outlook. Thanks, Eva, for the introduction. I'm going to share my screen—let me know once you can see it. It appears we’ve had a brief technical hiccup, but we're back online now. As soon as I hit share, my Teams crashed, but technology can be unpredictable at times. We’re good to go now—thanks for your patience.

We're recording this on January 29, 2026, around 12:33 p.m. This time of year always prompts me to reflect on past events and what lies ahead. When I think back to my first annual outlook in 2015—which was in person—it’s remarkable to see how markets have shifted over the years. There have been several turbulent periods, such as 2015, 2018, 2019, 2020, and 2022, all of which have shaped my approach to decision-making. The market is continuously evolving, compelling investors and portfolio managers like ourselves to always look ahead and anticipate what’s around the corner.

As your investment managers, our role is to help you navigate these changes, to think ahead about your portfolios and overall strategy. Today, my goal is to offer perspectives that help you prepare for what’s next. Please enjoy the outlook and presentation, and remember that the opinions shared here do not necessarily reflect those of National Bank Financial. Everyone’s suitability and risk tolerance is unique, so if you have any questions about the topics discussed today, feel free to reach out to Eva or myself. We’re happy to address your concerns and discuss how these ideas might fit your needs.

There’s a lot to cover today, including market performance last year, the ongoing discussion around artificial intelligence, and how different asset classes perform in various conditions. I’ve reviewed extensive research from Canadian, American, and international investment firms, and there’s a lot of buzz about AI dominating the market. While I won’t focus heavily on AI today, it’s still relevant. For instance, last year’s returns from Nvidia and gold miners contrast sharply, and I’ll share a chart soon so you can form your own opinions.

We’ll also look at economic performance and expectations for the coming year, particularly the job market. Central banks have been closely monitoring employment, as it’s a major driver of policy decisions over the next 12 months. We’ll review a chart on this topic. Inflation has also come to the forefront—after years of little discussion, it’s now a dominant headline. Metrics like core CPI are important, though personal experiences, like the price of coffee doubling since the pandemic, highlight the impact of inflation.

Geopolitics remain a critical factor, though I’ll only touch on it briefly. The global situation is complex and influential, but not the sole driver of market outcomes. Interest rates will be a major determinant, particularly in consumer-driven economies like the U.S. Higher rates tend to slow economic growth and affect stock performance. We’ll examine which stock sectors and countries performed best last year, and discuss strategies for positioning portfolios moving forward.

Finally, I’ll introduce the Heart Total Terrain Portfolio—a global best ideas basket that divides investments among Canada, the U.S., and international markets. This was formally launched on October 1 last year with Eva’s help and is now rolling out. We’ll discuss its composition and how it may fit into your broader investment strategy.

Let’s begin by reviewing how markets closed last year. This overview is vital for understanding where gains were made and which trends are worth watching. Rather than focusing on a single indicator, it’s important to monitor several key factors. For those interested in economic conditions, the 10-year bond rates in Canada and the U.S. serve as useful gauges for growth or contraction. Rising rates often signal expansion, while falling rates may indicate concerns about contraction. Of course, central bank interventions can also influence these movements.

Alongside equities, precious metals like gold and silver are noteworthy. Gold has surged past 5,600 recently, and silver has topped 100. These moves are driven more by momentum and speculation than fundamentals at present, but are important trends to monitor. Oil trading around $60 per barrel presents opportunities, as we may see a rebound, making it an attractive entry point for stock investments. These are among the indices and economic factors I track daily, and we’ll revisit these numbers next year to see how things have evolved.

Moving to asset performance, the comparison between GDX (the gold miners index) and Nvidia highlights the diverse outcomes of last year. Nvidia gained nearly 60%, while GDX rose by 120%. Many clients had significant exposure to precious metals, both directly and through miners, which contributed positively to performance. Now the focus shifts to how best to manage these holdings going forward.

Turning to the economy, we review forecasts for the U.S. and Canada, as well as interest rate projections and currency trends. The U.S. current account deficit remains substantial, with forecasts suggesting it will stay above one trillion dollars for the foreseeable future. Canada faces similar challenges, with ongoing current account deficits. The interplay between these figures and interest rate differentials will impact the Canadian dollar relative to the U.S. dollar.

Regarding interest rates, the U.S. Federal Reserve is currently at a 3.5% overnight rate, with one more 25-basis-point cut expected this year. I believe this forecast may be conservative, and a new, more stimulative Fed chair could accelerate rate cuts. For Canada, the overnight rate stands at 2.25%, with no changes anticipated until the fourth quarter. The rates market is pricing slightly higher, around 2.35%. The Canadian housing market is more sensitive to short-term rates, and minimal changes are forecasted, but much depends on economic performance and employment.

Unemployment in the U.S. has reached a 50-month high, a development that may prompt accommodative central bank policies. While recent tax cuts aim to boost job growth, rising unemployment warrants close attention and could be a key factor in future recessions, as history shows.

Inflation, once a seldom-discussed topic, now dominates economic conversations. Metrics used by central banks show inflation surprising to the downside in both the U.S. and Canada, providing room for potential rate cuts. While asset price inflation is likely if rates are cut, broader consumer inflation may not follow suit.

Geopolitics have played a significant role in shaping the current global environment, with trade tensions and conflicts influencing market sentiment. Although the landscape is complex, I won’t delve deeply into it today, but it remains important for portfolio management.

Examining yield curves, both Canada and the U.S. have seen shifts over the past year, with expectations of future flattening. Market performance across countries reveals that South Korea, Saudi Arabia, and India present interesting opportunities, while U.S. markets underperformed the global average last year, raising questions about the sustainability of AI-driven growth.

Looking ahead, the world economic outlook emphasizes the importance of rates of change over absolute numbers. The U.S. economy is expected to expand, while Canada may decelerate. Australia and India, among emerging markets, offer potential investment opportunities, particularly if economic policies succeed.

Investment indicators to watch include cyclical and monetary conditions, momentum, valuations, and sentiment. The U.S. economy currently faces headwinds, with jobs, manufacturing, and consumer confidence in risk-off territory. Globally, growth and financial markets remain positive, but monetary conditions are slightly negative due to tight credit spreads and a flat yield curve. Momentum has rolled over in some assets, while valuations suggest bonds may offer reasonable value and portfolio protection.

Sentiment is a crucial gauge, with extreme pessimism offering buying opportunities and extreme optimism signalling caution. Last April, when pessimism peaked, it was an opportune time to invest, and sentiment has since shifted to neutral.

Technical indicators reveal that the gold-to-oil ratio is at extreme levels, suggesting risk for gold and potential upside for oil. The Canadian market’s strong performance is largely due to commodities, especially precious metals, which now comprise a record weight in the TSX—an extreme level worth monitoring.

Speculative positions in U.S. 10-year bonds show continued selling, but I see potential for capital appreciation if rates decline. Bonds, often overlooked, now present attractive risk-reward profiles and can serve as true diversifiers in portfolios.

Recent trends in commodities show oil beginning to recover from a downtrend, gold at elevated levels, and copper slightly stretched. While silver, gold, and copper saw strong returns, energy and agriculture lagged, presenting opportunities for reallocation.

Government spending remains structurally high worldwide, countering some arguments for precious metals as safe havens. Diversification across assets is increasingly important as fiscal stimulus continues.

Market corrections, like last year’s tariff tantrum, are regular occurrences. Success in investing often hinges on actions taken before and after such events. Historical data on S&P 500 all-time highs shows periods of U.S. underperformance, underscoring the importance of diversification and stock selection.

Central banks globally have mostly shifted to rate cuts or holds, with only a few recent hikes in Brazil, Taiwan, and Japan. Their actions will continue to influence markets and economies.

The U.S. Federal Reserve has reduced its balance sheet from $9 trillion to $6.55 trillion, but future expansions are likely, especially with new leadership. This cycle of tightening and expansion impacts investments and currencies.

Canadian policy rate adjustments have not yet affected 5-year rates, suggesting a potential mispricing. Historically, 5-year rates drop after central banks halt rate increases, so this divergence warrants attention.

Our economic team forecasts modest declines for major indices in Q2 2026, based on fundamentals. Risks and opportunities abound, especially in areas like quantum computing and AI—fields that offer long-term potential but remain in early stages.

The Heart Total Terrain Portfolio, now officially rolled out, balances holdings across Canada, the U.S., and international markets. The portfolio is actively managed and continuously adjusted, with quarterly updates available. Please reach out if you’d like more details or to discuss how it fits into your investment plan.

In closing, thank you for your trust and for joining us today. We strive to position your portfolios for consistent returns with manageable risk. Looking ahead, I see opportunities in long-term bonds, yen exposure, international markets like India and Saudi Arabia, global dividend stocks, consumer discretionary, and energy. Gold and silver may have reached peak fear, offering chances to take profits and diversify. As always, we’re here to help you achieve your goals, and we look forward to another year of engaging markets and opportunities.

If you have any questions, please email Eva or myself. No questions have come in so far, which usually means the presentation was clear. Please visit, subscribe, and follow us on YouTube and LinkedIn at Heart Investment Group. The link to our daily financial updates will be in the video caption, and email subscriptions for newsletters are available upon request. Thank you again for listening, and enjoy the rest of your day. Take care!