Below, you will find our monthly market update and relative information that pertains to the current state of the economy.

Market Update

• Market indices ended the month with mixed performance, with some finishing higher while others closed lower.
  • • The S&P 500 finished at 7,489.72 pts (-0.13%)
    • The DOW finished at 52,485.03 pts (+0.32%)
    • The NASDAQ finished at 25,373.85 pts (-3.20%)
    • The TSX finished at 35,226.14 pts (+1.06%)

Canada

Monetary Policy

• On July 15^th, The Bank of Canada (“BoC”) decided to leave the overnight lending rate unchanged.
  • Currently, the overnight rate is 2.25%, the Bank Rate is at 2.50%, and the deposit rate is at 2.20%.
  • “Governing Council judges the current policy rate remains appropriate to sustain the economic recovery and bring inflation back to the 2% target, in line with the MPR projections. Uncertainty is still high. Governing Council will continue to assess the strength of the Canadian economy and the outlook for inflation and is prepared to adjust monetary policy as needed. The Bank is committed to maintaining Canadians’ confidence in price stability through this period of global upheaval.”
  • The next interest rate announcement for 2026 will take place on September 2^nd, 2026.

Economic Data

• Statistics Canada reported that Canada’s economy added just 18,200 jobs in June. While June’s gains were a slowdown compared to the 87,800 job additions in May, it was the second consecutive increase and topped economists’ expectations.
• Canada’s unemployment rate fell to 6.5% in June from 6.6% in the previous month.
• Statistics Canada reported that Canada’s inflation rate was 2.8% in June, down from 3.2% in May, and slightly below economists’ expectations.

U.S.

Monetary Policy

• The Fed decided to leave the target range for the federal funds rate unchanged in its July meeting.
  • The target range for the federal funds rate is 3.50-3.75%.
• “The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability.”
• The next Fed meeting will take place on September 15^th & 16^th.

Economic Data

• The annual inflation rate in the U.S. fell to 3.5% in June from 4.2% in May, which matched economists’ expectations. On a monthly basis, consumer prices declined by 0.4%, which was their first monthly decline since 2020.
  • The annual core inflation rate eased to 2.6% from 2.9%, suggesting some underlying price pressures cooled off.
• U.S. employers added 57,000 jobs in June, well below expectations and the smallest gain in four months. The U.S. unemployment rate declined to 4.2%, its lowest level in a year.
• The U.S. trade deficit widened to US$77.6 billion in May from US$54.6 billion in April, which was the largest trade deficit since March 2025.
  • Imports rose to US$395.3 billion, driven by higher purchases of pharmaceuticals, cellular phones, and passenger cars.

Global

• The European Central Bank (ECB) held its policy interest rates steady at its July meeting, following its hiking of the rates in June, which was the first since 2023.
• China’s gross domestic product grew by 4.3% year over year in the second quarter of 2026, which was down from 5.0% in the first quarter of 2026 and its weakest pace of growth since the fourth quarter of 2022.
• A flash estimate showed that Europe’s annual inflation rate fell to 2.8% in June from 3.2% in the previous month, marking its lowest level since March.
  • Energy prices were the biggest driver of the slowdown, easing to 8.7% year over year from 10.8% in May, as pressure from the Middle East conflict began to fade.

Notes From our Firm

• This month, we’re sharing a piece from one of our fund partners that breaks down how investors are reacting to current market conditions and what that could mean going forward
• Market narratives shift quickly, but investor behaviour tends to repeat. Understanding that behaviour can help avoid emotional decisions that hurt long-term results
• Articles like this give useful context around volatility, sentiment, and positioning, which all play a role in how portfolios perform over time
• If you want to read the article: CLICK HERE

As always if you have any questions, please feel free to reach out to us. Or, if you know someone who would like an opinion on their investments or insurance, please connect us! There is no better compliment than a referral from one of our current clients.

Yours Truly,

The Team, C.R. Smith Financial

Community, Respect, Service & Financial Integrity