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

Market Update

• All the market indices closed higher than the beginning of the month.
  • • The S&P 500 finished at 7,580.06 pts (+5.15%)
    • The DOW finished at 51,032.46 pts (+2.78%)
    • The NASDAQ finished at 26,972.62 pts (+8.36%)
    • The TSX finished at 34,769.14 pts (+2.37%)

Canada

Monetary Policy

• On April 29^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 decided to maintain the policy rate at 2.25%. We are closely monitoring the impact of the conflict in the Middle East and how the economy is responding to US tariffs and trade policy uncertainty. Governing Council is looking through the war’s immediate impact on inflation but will not let higher energy prices become persistent inflation. As the outlook evolves, we stand ready to respond 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 June 10^th.

Economic Data

• The Canadian economy lost 17,700 jobs in April. This fell below economist expectations of 10,000 job gains.
• Canada’s unemployment rate rose to 6.9% in April from 6.7% in the previous month, rising to a six-month high.
• Canada’s annual inflation rate climbed to 2.8% in April from 2.4% in March, coming in below economists’ expectations.
  • Energy was the main driver of the higher rate, with prices jumping 19.2% year over year.
  • This is largely in response to the ongoing conflict in the Middle East, which has disrupted global oil supply.
• Statistics Canada reported that Canada’s gross domestic product shrank at an annualized pace of 0.1% over the first quarter of 2026, disappointing economists who were expecting the Canadian economy to grow.
  • The contraction in the fourth quarter of 2025 was revised lower to 1.0%, annualized. The two quarterly declines pushed Canada’s economy into a technical recession.

U.S.

Monetary Policy

• The Fed decided to leave the target range for the federal funds rate unchanged in its April meeting.
  • The target range for the federal funds rate is 3.50-3.75%.
• “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook. The Committee is attentive to the risks to both sides of its dual mandate. In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 3‑1/2 to 3‑3/4 percent.”
• The next Fed meeting will take place on June 16^th & 17^th.

Economic Data

• The U.S. inflation rate rose to 3.8% annually in April from 3.3% in March, marking its highest rate since May 2023.
  • Energy was the main driver of the higher rate, with gasoline up nearly 30% and fuel oil up over 50% year over year.
  • This is largely in response to the ongoing conflict in the Middle East, which has disrupted global oil supply.
• The U.S. economy added jobs for a second straight month, which is the first two months of consecutive job gains in almost a year. The U.S. economy added 115,000 jobs in April, seeing strong gains in the health care and transportation industries.
  • The U.S. unemployment rate held steady at 4.3%.
• Sales of existing homes in the U.S. rose for a third consecutive month in April, rising by 1.4%, which topped economists’ expectations.
  • The consecutive monthly gains were boosted in part due to a temporary dip in mortgage rates earlier in the spring, which drew more buyers back to the market.

Global

• A preliminary estimate showed the U.K. economy grew by 0.6% in the first quarter of 2026, an increase from the 0.2% growth recorded in the final quarter of 2025.
  • The services sector was the biggest driver of performance, expanding by 0.8% in the quarter. Production and construction also contributed positively to growth.
• China’s annual inflation rate rose to 1.2% in April, which was above most economists’ expectations and the 1.0% rate recorded in March.
• According to a preliminary estimate, Japan’s economy expanded by 0.5% over the first quarter of 2026, building on the 0.3% growth recorded in the final quarter of 2025. On an annualized basis, Japan’s economy grew by 2.1%.

Notes From our Firm

• As mentioned, Canada is being described as in a “technical recession,” which simply means the economy has shrunk for two consecutive quarters (click HERE to read more).
  • This is a standard definition, but not necessarily a sign of a deep or widespread downturn.
  • The slowdown has been mild, with only small declines in economic output, and some areas like consumer spending and energy are still holding up.
  • The weakness is mainly coming from reduced business investment, government spending, and ongoing uncertainty around trade and global conditions.
  • Early signs suggest the economy may already be stabilizing, so this is best understood as a period of slower growth rather than a major economic crisis.

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