Market Update

As we approach the end of 2025, financial markets continue to reflect a mix of optimism and caution. Many investors are asking the same question: Where do things stand as we enter 2026? Below is a quick overview of the key themes shaping today’s market environment.

Interest Rates: Starting to Stabilize

After a period of rising interest rates, things have finally begun to level off. This means:
• borrowing costs (such as mortgages and loans) remain higher than a few years ago, but increases have slowed
• savings accounts, GICs, and other guaranteed products are still offering attractive rates
• overall, the financial environment feels more predictable than it did last year

Stable rates help households and investors plan with greater confidence.

Inflation Is Easing

Prices aren’t rising as quickly as they were in recent years. Inflation is moving closer to the Bank of Canada’s target, which is good news for everyday budgets and long-term financial planning.
However, groceries, services, and housing remain expensive, so many Canadians still feel financial pressure—this is normal and expected.

Stock Markets Show Steady Improvement

Stock markets in Canada, the U.S., and globally performed more positively through 2025. Key reasons include:
• companies reporting better earnings
• interest rates stabilizing
• strong performance in technology, financial services, and healthcare

Even with this improvement, it’s normal to see short-term ups and downs. Staying focused on long-term goals is usually the best approach.

Bond Markets Recovering

After a challenging period, bonds (fixed-income investments) improved this year. This helped restore balance for many investors who rely on bonds for stability and income.
A healthier bond market means:
• better diversification
• improved long-term planning options
• more predictable income strategies for retirees

Housing Market Adjusting Gradually

Higher mortgage rates have slowed down housing activity across many regions. While prices haven’t dropped dramatically, the market is moving at a more moderate pace.
Clients with mortgage renewals approaching may want to:
• review their budget
• look at cash flow needs
• explore options with their advisor for long-term planning

What This Means for You

This year’s improvements—inflation easing, interest rates stabilizing, and better performance in both stocks and bonds—provide a healthier backdrop as we head into 2026.

Here are a few practical steps to consider:
• Review your investment mix to ensure it still fits your goals
• Talk to your Account Manager if market changes have you feeling uncertain
• Update your financial plan when your life or priorities change
• Avoid making quick decisions based on short-term market movements

We’re Here to Support You

If you would like a personalized review of your investments or financial plan, or if you simply want to ask questions about the current market environment, your MWFS Account Manager is always ready to help.

A short conversation can help you enter 2026 feeling more confident, informed, and prepared.