- Markets remain highly reactive to geopolitical headlines, with ceasefire news triggering sharp moves across oil, gold and silver.
- The market is not currently pricing in imminent rate cuts, with expectations remaining on hold.
- Canada may be entering a period of relative outperformance versus the U.S., supported by strength in energy and materials.
Markets react sharply to geopolitics as trends shift beneath the surface
In this week’s Markets in Motion, Bruce Campbell highlights how a sudden ceasefire announcement triggered immediate volatility across commodities. Oil prices dropped sharply on the news, while gold and silver — which had been under pressure — rebounded strongly, underscoring how quickly market narratives can change.
At the same time, interest rate expectations remain steady. Bond market signals suggest that investors are not anticipating meaningful rate cuts in the near term, with inflation still a key factor to watch.
Looking at the broader picture, longer-term trends are beginning to favour Canada. The TSX has recently broken above key long-term levels relative to the S&P 500, with momentum indicators strengthening. This suggests a potential shift toward Canadian outperformance, particularly in sectors like energy and materials.
However, in the short term, energy may face pressure. With oil pulling back and technical indicators showing overbought conditions, the sector could see near-term volatility despite its longer-term strength.
Campbell also points to stock selection as a key focus in this environment, highlighting how combining fundamental strength with technical confirmation can help identify opportunities as markets rotate.
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