September 11, 2026

This is a new weekly column and we’re workshopping the title. For now, it’s the The Weekly Strip.

This week has been characterized by higher interest rates and a mostly downward move in stock markets. Here’s a quick look at what mattered in markets this week, and what probably didn’t.

• Interest rates are moving higher. Bond yields jumped around the world, continuing a trend that has been in place for much of the year. Although much has been written about the concern surrounding government deficits, we would argue that higher yields are much more a result of inflation concerns. If investors expect higher inflation or are more uncertain about future inflation, they will demand higher interest rates when lending money.

• Oil is back above $100 a barrel. Fueling higher inflation concerns as tensions between the US and Iran continue to escalate, with a significant humanitarian cost. Neither side appears particularly interested in being the adult in the room. For Canada, higher oil prices are a double-edged sword. On the one hand, our economy is highly oil-dependent and the energy sector comprises over 15% of our stock market. On the other hand, higher prices for gasoline create an added burden on family budgets, which are already stretched.

• Stocks have had a rough week. Stocks have had a good year, but they haven’t moved up in a straight line. Despite a strong second quarter, stocks have been sideways to down since the start of July, and this week we’ve seen most stock markets trade down. Inflation concerns and higher interest rates have dampened investor enthusiasm. It’s a good reminder that today’s market sentiment has the shelf life of an avocado.

• Canada and the United States found some new things to argue about. Canada decided to match the US’ imposition of tariffs on $27.6 billion of Canadian goods dollar for dollar. This is the kind of mutually damaging quid pro quo that makes economists sick. Yes, the dollars are big and the behaviour is frustrating, but it’s important to take the facts in context: the tariffed goods represent about only 1% of Canada’s total annual economic output and roughly 80% of trade with the US is still “free”.

The bottom line: Higher interest rates, higher oil prices, and ongoing geopolitical conflict are all a drag on economic growth, the collective psyche of us who read the news, and our pocketbooks. That said, these headwinds are coming at a time when economic growth is solid and corporate profits are continually hitting all-time highs. Don’t forget, these issues – higher rates, high oil prices, and ongoing conflict – have been persistent for several years, yet the stock market has remained very strong. Especially on a date like September 11th, we should remember that markets can thrive despite challenging circumstances.