July 2026 Monthly Market Insights

Markets are entering a more complex phase where improving growth signals, moderating inflation, and evolving capital markets dynamics are unfolding simultaneously. While recession risks have eased, the economy remains uneven beneath the surface, and policy is still restrictive. At the same time, a reopening of the IPO window is beginning to reconnect public markets with long-duration growth assets—an important shift after several years where many of the most dynamic companies remained private. For investors, this backdrop reinforces the importance of diversification across both traditional asset classes and emerging sources of return.

Source: Bloomberg.

Canada’s latest GDP release surprised to the upside following a brief technical recession, pointing to greater underlying resilience in the domestic economy than previously expected. The rebound appears to reflect stabilization across consumer activity and exports, even as higher interest rates continue to weigh on housing, credit-sensitive sectors, and business investment. At the same time, it is too early to conclude that a durable recovery is underway. Much of the prior monetary tightening has yet to fully feed through, and forward-looking indicators remain mixed. The result is likely to be a patchy growth profile, with stronger headline data occasionally masking underlying fragility across rate-sensitive parts of the economy.

Source: Bloomberg.

Bottom line: The economy is proving more resilient than feared, but the cycle remains fragile. Expect continued volatility in growth data as rate effects persist.

After a prolonged slowdown, the IPO market is beginning to reopen, led by large, high-profile growth companies. This could bring more private-market businesses into public portfolios, but it also raises an important question for investors: at what price?

Many of the companies now coming to market are large, fast-growing, and highly visible, but they are also arriving with elevated valuations, limited trading float, and uneven profitability. That combination can create short-term excitement, particularly when index inclusion forces passive funds to buy, but it can also increase concentration and valuation risk within public markets.

History suggests investors should be careful about treating a reopening IPO window as an automatic positive. Broad baskets of IPOs have generally lagged the market, partly because newly listed companies often share characteristics associated with expected returns such as rich valuations, weaker profitability, and heavy reinvestment needs. The current cycle may be unusual because of the size and profile of the companies involved, but the same discipline applies.

Source: Bloomberg.

Bottom line: A reopened IPO market can expand the public investable universe, but it is not automatically good news. For investors, the key question is whether new listings can justify their valuations once the initial excitement fades and index-driven demand has been absorbed.

Inflation has continued to move lower across major economies, driven largely by easing goods prices and improvements in global supply chains. However, services inflation remains more persistent, supported by wage dynamics and relatively resilient domestic demand, particularly in developed markets.

This persistence is shaping the central bank response. While policymakers are increasingly confident that inflation is moving in the right direction, they remain cautious about easing too quickly and risking a reacceleration. As a result, markets that have priced in aggressive rate cuts at times may be forced to adjust toward a more gradual and conditional easing path.

For portfolios, this creates a more nuanced rate environment. The direction of travel for policy is likely downward, but the path may be slower and less predictable than in past cycles, particularly if growth remains resilient or inflation proves sticky in key components.

Source: N/A

Bottom line: The direction of rates is likely downward, but timing and magnitude remain uncertain. Position portfolios for a gradual transition rather than a sharp pivot.

Data and opinions as of June 30, 2026.

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