We are living through a period of shifting order. Global alliances are outwardly frayed, old rules have been bent, and new ones are being formed. As Prime Minister Carney reminded the world in January: “The old order is not coming back. We shouldn’t mourn it. Nostalgia is not a strategy.”1
Indeed, the shifts appear to be more rapid, with a near-constant stream of geopolitical surprises that have become almost routine. Amid shifting U.S. trade and tariff measures, evolving foreign policy and even war, uncertainty has grown and global conflict has widened. Even before recent events, there was a notable flight to safety in precious metals while the U.S. dollar declined. These defensive trades prompted some to ask once again: Is gold becoming the global reserve currency?
For now, they reflect a world placing greater focus on sovereign resource security and geopolitical insulation. Of course, geopolitics and economics remain intrinsically intertwined: while geopolitics explains how global leaders interact with their counterparts, economics can influence, and more importantly, constrain, their ambitions.
As events continue to reshape the global order, oil prices have spiked, renewing inflation worries. Over recent months, there have been broader shifts in markets. Technology stocks, long the market’s darlings, have faced pressure despite many posting solid earnings. Elevated capital spending has continued to draw scrutiny, even though returns on such investments can take years to materialize. Concerns about artificial intelligence’s potential to disrupt have also extended across sectors.
There has also been a rotation toward more undervalued market sectors. The Dow, considered by some young investors as “about as relevant as paper stock certificates or ticker tape,” outperformed the S&P 500 and NASDAQ to start the year, prompting headlines like “Boring is Back.”
Meanwhile, amid all of these shifts, some order emerged: the U.S. Supreme Court ruled that invoking tariffs under the Emergency Economic Powers Act was not legal. Although not expected to change the current administration’s approach, its clear legal boundaries augur well for the future. Nevertheless, uncertainty remains as renegotiations for the U.S.-Mexico-Canada Agreement (USMCA) draw near.
While the skies may appear cloudier for Canada’s economic prospects as a middle power, our position shouldn’t be underestimated: an energy superpower with vast natural resources, abundant fresh water, three coastlines, the world’s most-educated population and political stability. We have undoubtedly been dependent on the U.S., given our close proximity. Even so, an Oxford Economics analysis suggests that a full USMCA collapse would reduce Canada’s GDP by about 1.8 percent below baseline and cut private investment by 6 to 7 percent.2 By comparison, the early 1980s recession, driven by high inflation and high interest rates, saw output fall by 5 percent and unemployment reach 12 percent, a reminder that Canada has endured far more severe shocks and recovered.
Against this shifting backdrop, the growing dispersion we see today rewards a thoughtful and selective investment management approach. At a time when uncertainty feels amplified and global policy-making remains volatile, discipline becomes increasingly important, particularly when the range of possible outcomes is wide. The constant shifts should also remind us that no cycle, policy regime or market trend is ever permanent, reinforcing the importance of maintaining a longer-term view.
As advisors, we are here to help you navigate this shifting order. We continue to monitor the evolving global situation. If you have questions or concerns, please don’t hesitate to reach out.
Wishing you warmer days ahead.
1. World Economic Forum, Davos, January 2026.
2. https://www.oxfordeconomics.com/resource/usmca-scenarios-north-american-trade-at-a-crossroads/