“In the world of business, the people who are most successful are those who are doing what they love.”
— Warren Buffett
Markets pulled back modestly this week as investors recalibrated expectations around interest rates and absorbed rising energy prices.
- TSX Composite: -1.42%
- Dow Jones: -0.44%
- S&P 500: -0.27%
- NASDAQ: -0.28%
Source: Bloomberg, March 19, 2026
Despite the short-term weakness, the underlying message from markets remains clear: economic fundamentals are holding up, and investors are adjusting—not retreating.
1. Fed Patience Reflects Economic Strength
Expectations for rate cuts have shifted meaningfully. Markets are now pricing in a more patient Federal Reserve, with the 10-year Treasury yield holding near 4.27%.
This isn’t a sign of stress—it’s a reflection of resilience.
- Economic growth remains steady
- Inflation is still above target
- Policymakers are comfortable staying restrictive
What this means for portfolios:
A “higher-for-longer” environment continues to support:
- Attractive income opportunities in fixed income
- Strong performance from high-quality companies with pricing power
2. Rising Oil Prices Signal Healthy Demand
Oil prices climbed above $110 per barrel, contributing to short-term volatility and pushing shorter-term yields higher.
While that can create noise in markets, the signal underneath is constructive:
- Global demand remains strong
- Economic activity is healthy
- Inflation expectations remain anchored long-term
Investment takeaway:
Energy-linked equities benefit, and diversification remains critical in navigating cross-sector opportunities.
3. Bank Capital Changes Boost Financial Outlook
U.S. regulators proposed easing capital requirements for banks—one of the most meaningful shifts since post-2008 reforms.
- Large banks: ~4.8% reduction in capital requirements
- Mid-sized banks: ~5.2% reduction
This unlocks:
- Increased lending capacity
- Higher share buybacks
- Potential dividend growth
Why it matters:
A stronger, more flexible banking system supports both economic growth and shareholder returns—particularly positive for financial sector exposure.
We believe in transparency—here’s what drove results this week.
Top Company: Arm Holdings (ARM)
Arm Holdings was a standout performer, rising 12.8% as momentum in AI infrastructure accelerated.
Unlike traditional chipmakers, Arm licenses the foundational designs powering:
- Smartphones
- Data centres
- AI-enabled devices
This asset-light, scalable model positions the company at the center of the semiconductor ecosystem.
Why we like it:
Arm benefits from the entire AI ecosystem—not just one product cycle—making it a uniquely durable growth story.
Financials led performance, supported by:
- Stable interest rates
- Increased capital markets activity
- Strong fee-based revenue streams
Key contributors included:
- BlackRock
- Goldman Sachs
- KKR
- Fairfax Financial
Outlook:
Diversified financial businesses remain well-positioned to deliver consistent results in today’s environment.
Our Value strategy was a strong contributor, driven by:
- Cash flow-generating businesses
- Strength in financials and energy
- Attractive valuations relative to earnings
In a higher-rate world, companies with durable cash flows outperform—and that’s exactly where this strategy is focused.
Looking ahead, several key economic releases will help shape market direction:
- Hiring pace: ~9,000 jobs/week in late February
- Slower than prior months, but still stable
Why it matters:
The labour market remains a key pillar of consumer spending and economic confidence.
- 7 consecutive months of expansion
- Slight softness in exports due to tariffs
- Strong domestic demand
Takeaway:
A resilient manufacturing sector supports both industrial and technology holdings.
- Most recent reading: 205,000 claims (below expectations)
Signal:
Employers are holding onto workers—a strong indicator of economic stability.