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Hello everyone, and welcome to the weekly roundup. Today, we’ll be discussing geopolitics, economic data, and earnings releases. Hello, Ben. Hi, Eva. How’s it downtown?

It’s great downtown. It’s a snow day for the kids, so they’re happy. It’s quiet, a little snowy, but peaceful down here. There’s been a lot of snow—it’s been coming down for hours. It’s interesting, as the start of the week looked promising, but now the weather has turned.

Let’s dive in. Geopolitics remains front and centre in the news. From unrest in Iran to instability in Venezuela, we’re getting plenty of questions about how these hotspots are influencing commodities, particularly gold, as well as the impacts on currency markets.

Thanks, Eva. Geopolitics is certainly the theme of the day, and it’s shaping much of what’s happening so far, especially in the context of Trump’s second term. Venezuela continues to be particularly relevant for Canada, though it doesn’t receive enough attention. The heavy crude Venezuela produces is similar to Canada’s, so if the U.S. can source it more cheaply from Venezuela, that’s a positive for them but a negative for Canada. This situation is still developing, with the Venezuelan military generally aligned with the U.S. and current leadership, while the police remain connected to Maduro. It’s important to keep watching this story, as it directly affects Canadians and the Canadian energy sector.

Other geopolitical events are also in focus, including ongoing unrest in Iran. It’s difficult to get reliable information due to the country’s closed nature, and it’s unlikely the U.S. could intervene as it did in Venezuela. Perhaps Israel might become involved, but the dynamics are very different.

Greenland has also become a focal point this week, with meetings between Denmark, Greenland, and other European leaders. So far, there haven’t been any notable outcomes, but France, Germany, and Denmark have sent troops to Greenland, signalling the European Union’s commitment to its protection. The economic impact here is less direct—it’s more about strategic positioning, particularly with Trump aiming to establish a defensive presence against Russia. There’s a lot still to cover in this area.

As for commodities, particularly gold and currency, the energy sector remains volatile. Developments in Venezuela, Iran, Qatar, and Saudi Arabia all have the potential to affect oil prices, which have already been fluctuating. If economic activity accelerates this year, oil could see a significant uptick. Gold, on the other hand, plays many roles, especially as a hedge against geopolitical risk and currency devaluation. The U.S. is facing the challenge of raising or rolling over around $10 trillion in debt this year, leading to potential currency devaluation and strengthening the bullish case for gold and silver. However, from a technical perspective, the precious metals market appears overbought, with heavy speculation making it fragile. For long-term investors, gold remains a worthwhile asset, but those who have already seen significant gains may consider taking some profits to reduce risk. Base metals are also highly volatile, mostly due to tariffs and trade issues, though these are not as prominent at the moment.

Moving to economic data, job numbers are slowing in both Canada and the U.S., even as broader economic indicators suggest expansion. This situation has implications for interest rates and central bank policy. In the long run, North America faces demographic challenges as the population ages and the workforce shrinks, though this doesn’t have an immediate impact on interest rates or inflation. Recently in Canada, the participation rate rose, leading to a slight increase in unemployment. Currently, interest rate projections in Canada remain mostly flat, with only minor expected changes over the next year, pending developments in inflation and GDP. In the U.S., unemployment may rise slightly, inflation seems under control, and the Federal Reserve is considering raising its inflation target from 2% to 3%, which could allow for faster rate cuts if needed. Overall, interest rates are likely to remain stable or decrease, depending on economic conditions.

On earnings, the season is underway, with some U.S. banks already reporting. Of note, Trump has suggested capping credit card interest rates, which could significantly impact U.S. financials, as current rates are around 20–22%. Such a cap would hurt bank profitability but could boost consumer spending, which is crucial for the U.S. economy. So far, financial sector earnings are solid, but the potential for regulatory changes remains a key issue to watch.

Turning to the charts, gold has been a major boon for Canadian exporters and has played a significant role in supporting Canada’s GDP. The IMF’s addition of the Canadian dollar to its reserve basket has also benefited Canadian bonds and currency. If gold prices decline, this could negatively impact Canadian GDP. Employment data in Canada has been choppy, with the participation rate and unemployment both rising recently. Should unemployment continue to climb, it may prompt the Bank of Canada to lower rates one or two more times, depending on economic developments.

Tariffs remain a hot topic, with ongoing debates in the U.S. Supreme Court regarding their legality. If tariffs are rolled back, it could temporarily boost the economy and markets, but other measures such as targeted taxes might take their place. The situation is complex, and temporary adjustments could affect various industries differently.

Please note, the opinions shared here are based on personal understanding and research, and may not reflect the views of National Bank Financial. Investment suitability varies depending on individual risk tolerance. If you have questions, feel free to reach out to Eva or me, or consult your advisor. Thank you for joining us for the charts today.

Looking ahead, Monday is Martin Luther King Jr. Day, so U.S. markets will be closed, making for a quieter week. We’ll continue monitoring the geopolitical landscape and its effects on markets. Gold and silver prices have continued to rise into the new year, prompting us to adjust portfolios by reducing gold exposure and increasing energy holdings. There’s still much to watch, particularly regarding how the U.S. might lower interest rates this year to manage its debt burden, and any changes in leadership could accelerate this process, possibly giving the U.S. economy another temporary boost.

As a reminder, our annual outlook for 2026 will be held on 2026-01-29 at 12:30 p.m., and invitations will go out next week. Please visit, subscribe, and follow us on YouTube and LinkedIn at Heart Investment Group. Links to our daily financial updates will be available in the video caption and via email. Clients can contact me for any questions or to book a review meeting with Ben. Thank you for listening, and have a great weekend after Friday.

Thanks, everyone. Goodbye.

Hello everyone, happy new year and welcome to the first weekly roundup for the year. Today we will cover geopolitics, economic data, and market sentiment. Hello Ben.

Hi, Eva. Happy New Year.

Happy New Year. We're back.

We are back. We had a little break. We had a week off, I think.

Yeah. Yeah.

Two weeks. Two weeks.

Uh two weeks. Yeah.

Yeah.

Uh, a couple of things to unpack. Lots has happened in this short year already. Um, we're going to start off with possibly the biggest geopolitical development so far this year, the US intervention in Venezuela.

Um, what does this mean for commodities markets and how could energy companies be affected? Unpack it for us.

I will try. I like how you said intervention. Intervention. That's a good way to describe it. Uh yeah, look, it's shocking really. It is. Um the uh you know, there had been obviously lots of threats about what was going on been Trump had been dancing around what was happening with Venezuela, targeting drug boats and trying to take tankers and you know, a lot of activity around Venezuela. And uh you know if you look at it from a pure economic sense it is a direct uh attack on the relationship with Canada is we ship heavy crude to the US and the US is reliant on that for their for their refineries and so if they're able to get heavy crude from somewhere else a country they own or are affiliated with in some way shape or form um then that's going to real put a put a big challenge on the Canadian heavy crude market and Canada in general. So initial view I guess from Canadian people in the in the oil patch that I talked to seem to think oh it's nothing to worry about because it's so far off into the future. I would tend to disagree with that. I think that uh it's pretty material.

If they have the ability to access a couple billion barrels a day of of heavy crude that doesn't ship from Canada, that has a big impact on what we're going to do with no refineries here either. That you know, I'm not exactly sure what that uh ramifications would be on the Canadian economy, but it would be negative. Um, and so I'm sure Carney and team have uh some thinking around what and how they're going to prepare for this.

It's true there would be a buildup because there is a theory as well that the infrastructure in Venezuela has has deteriorated and I'm sure that's the case. I don't think it's maybe as dire as everyone seems to indicate. um you know he is uh Maduro has taken land like um he went into Gana and effectively took over a piece of their country that he said was their oil reserve because it was connected to the the Venezuelan oil oil reserve. So you know there's lots of oil there and the infrastructure is probably not quite as bad I think as everyone thinks. So, it's material. And as things continue on, Trump has said effectively that they're going to try to to to have some US uh control in Venezuela.

So, I think it's a material event and the knock-ons of course of taking over Greenland and Cuba and Colombia and potentially um obviously they had a potentially pan Panama as well. I think it's shocking that the market hasn't reacted differently to it. Um, but I think we're going to have to start taking Amanda's word.

This is definitely something to keep an eye on.

Sure.

Speaking in the Canadian uh economy, PMI and job numbers were recently released. Um, what do these numbers tell us about the direction of interest rates and the likelihood of further cuts in Canada this year?

Yes, I think we c we were coming into this year pretty neutral like likelihood of a hold in January. You know, I I'm still leaning towards the view that I think rates come down one more time in Canada. Not sure that aligns with every every other um economist view at this point. Um but judging what we saw recently to your point is that things are a little bit softer than expected. And so we went from, you know, really kind of a 0% chance of a cut at the end of January to something around 25% chance of a cut right now. So I think as the numbers continue to come out, if they are weak, we also saw weak housing numbers in Toronto yesterday. Um, third straight month of a decline in housing prices. So, you know, I I still think those are going to play a part into what happens with interest rates. You we're probably near the end of this cycle, barring a material recession.

um we would need something to change for us to cut materially more than this and you know so um so I think rates maybe one more but likely we are on hold for a while um the if you pull the consensus of the Canadian economists they think that rates get cut in the the sorry rates get incre starting to increase in the last quarter of this year but you know we have a lot of ground to cover before there. So, I wouldn't put a lot of weight into that.

Okay. Uh, back to the commodities markets, specifically gold and silver prices. Um, they are becoming overheated. Um, is this a market thing or global events playing a role and should investors be cautious now?

It's a great question. I think it's something that I'm wrestling with at this point. You know, I I think that yeah, when asset prices go up as materially as gold and silver have in the past 12 months, it starts to make you think what what um what happens from here. The other thing that you'd look at is it was I was hardressed to find a forecaster that says that gold and silver are going to be lower 12 months from now. And that's a big warning sign for me when when you have everybody saying something's going up from here. Um that causes me a lot of concern. Um so the fundamental case though, like it's it's incredible. Of course you should own gold. Like geopolitics is out of control. The currency, there's so many fundamental reasons why you should own it. Um but when everything says yes, you need to do this. um that's probably not necessarily the right thing to do. So um so yes, so for gold and silver frothy I think as I' as I mentioned in one of the dailies this week and it's something that's causing me some concern and some more direct attention around profit taking. Um the question I guess I've been wrestling with is where to go with the money. Um but uh definitely um starting to get more and more concerned that we're if not at the end of the uh this current move certainly very close to it.

Okay. Yep. Let's see the charts.

Let me know if you can see that.

Not yet, but I think it's coming. Okay, there you go. Up now.

So, okay, perfect. All right. Well, um, as note, January 8th, 1:00 we're recording this 108 actually right now on the 8th of January. So, that's that's good luck. Uh, first one in 2026. So, looking forward to an interesting year as they always are. So, we'll go through a couple of different charts today. Sentiment, what's going on, how people are feeling. I know I've shared this one in the past. It's from our chief investment office team. I think it's a great way to think about sentiment and so you know there's everybody looks at the world a little bit differently but sentiment is I think a key driver for what happens to asset prices. Um and so this is a look at momentum volatility breadth that means how many uh stocks are participating risk appetite speculation in the surveys. So momentum here is uh picking up and so this little squiggle here is last week's um so we've had a shift from you know on the edge of extreme pessimism to tipping up to optimism and so that's interesting. So I'd certainly pay attention to that as you get a movement towards um the optimism side. You know this is a sell signal buy signal sell signal. So that's kind of that's the way I would view this gauge. And so I think it's an important piece of information that I look at on a weekly basis um to assess uh the kind of how big picture the market's feeling about the world.

So as I mentioned as we talked off the top here just about central banks interest rates what's happening what's going on. And so this is our most recent data set. So um this was as of Monday I guess. So 21% chance of likelihood of a cut. So it was zero coming into this year. Now we're starting to lean towards potentially. So as you can see here, you got kind of the futures market pricing in five basis points. So it's telling you that potentially we're going to cut get a cut. And then the US here at four basis points, but as I mentioned, between now and the end of this month, we have tons of information, tons of data to come out in both Canada, US uh before we get there, which could tip the scale um uh in either direction. And as we know last year there were tons of swings and cut not cut not cut. So um so um you know looking at these numbers right now doesn't give me any material view on whether we're going to have a cut end of this month but we're starting to tilt towards that based on the current data that's come out. US gives a little more guidance on forward rate cuts. And so it looks like right now that they're starting to price in at least a few next year or this year, excuse me, in the US. And so that's something I'd be uh I'd be conscious of. And you know, depending on what happens when PAL gets replaced in May, I think we could see this number change materially if it's quite a uh proTrump um central bank. Europe kind of pegged at the 2% pretty close to where we are. I'd say there's no real reason that you would see this change materially unless you get a a collapse in the European economy or you get a reaceleration inflation which I don't see either of those things happening right now. So Europe's kind of in a hold mode right now. So that gives you a bit little bit to uh think about from a perspective of what happens from here.

And on this chart, and I put this chart up a few times last year as uh the viewers that watch frequently would see this. Um, so this is gold, the red line tilting up overlaid with WTI oil. And so these are things that I think they they often when you get these these are the alligators as I talk about alligators are always closed. And so the question of what happens from here? Do we get a reaceleration? All the fundamental reasons around why gold should go higher. The answer is maybe. Maybe that happens. Um but you know what could potentially happen too? I mean, in the US, if we get some of the things that's proposed to be implemented in the US and you get a small ratcheting back of what President Trump's been doing on the geopolitics side, you could see these things change quickly where, you know, Trump has suggested that he's going to uh stimulate the economy a lot this year fiscally. And so if we get fiscal plus monetary plus we get that this corporate tax cuts that are coming in and we get a bit more calm on the geopolitical side I think you could see a close of this which ultimately results in probably higher oil prices and lower gold prices. So this is something that's causing me a lot of time and attention to see where are the opportunities on a profit taking but also where are the opportunities on uh on an investment perspective at oil at these levels. So real important chart that I think we need to look back on 12 months from now and see what it looks like.

As always, the opinions expressed do not necessarily reflect those National Bank Financial. Um, if you have any questions at any point, certainly feel free to reach out to myself or your advisor. Um, if there's something specific that you think you want to talk about, please let us know. Everyone's risk factors a little bit different, so take that into consideration when you're assessing the information that I'm sharing with you today.

That's it on the charts today.

Thank you, Ben.

Welcome.

So, what's on the agenda for next week?

Well, it seems like this week the market's back to work. Um, and so there's so much to go through really. Um, the amount of research that comes out now and the speed at which that research comes out now is incredible. Um the uh finit uh Twitter Twitter sphere I guess not that ex exosphere you can't really even say that um provides so much information on real time that I'm still digesting that as you know we have the January 29th um outlook which you're going to mention talk about. So preparing for that and looking at all the the data that's out there um as we head into the start of every new year. It's I think a real big time for me to assess what happened last year. You know, as you get as the year progresses when you're making investment decisions, you just get locked in this loop of looking for the opportunities, moving to the next one, making adjustments as we wrap into the end of the year. Lots of tax changes we are made. And so now that all that's been digested and dealt with, now we start to look out what's changed, what's new, what's different. And so lots of time spent on on research and preparing and uh then then looking to make some uh implemented changes uh into the portfolios as we get into the start of this year.

Sure. And contributions. Time for a reset.

Exactly.

Okay. Great. Uh like Ben had said, our annual outlook for 2026 will hold on January 29th at 12:30 p.m. I would be sending out the invitation to everyone shortly. Thank you everyone for listening. Remember to visit, subscribe, and follow us on YouTube and LinkedIn at Heart Investment Group. The link to our daily financial heartbeat will be in the caption of the video and in your email box. for our clients. Please reach out to me if you have any questions or if you'd like to book a review meeting with Ben. Thank you everyone for listening again and have a great year ahead. Bye.

Let's go. Thank you. Bye.