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Sometimes its hard to tell when a market cycle has hit bottom, but the latest trigger in early April was the framework for a ceasefire to the war in Iran. While the details are still being worked on, and the ability for peace to last in the region is on thin edges, the markets have begun to look past it and back to economic indicators driving growth.
April has seen the markets shoot higher off their lows in March as the S&P 500 is up almost 13% this month erasing the 2026 losses and pushing to a gain of 4.6%. The NASDAQ, rebounded 18.8% for April to be in positive territory of 6.3% for 2026. In Toronto, the TSX was more muted at 5.5% for April, and being up 6.2% for 2026.
What has occurred over the past month is a recovery in risk assets such as tech stocks and bitcoin to name a couple. Earnings released this month have mainly been in line with expectations, while future guidance is being revised in the face of higher oil prices and the influence of the Iran war on global shipping/transportation.
This week in Canada, we have seen GDP released at 0.2% for the month of February, keeping the annual pace at 1.7%, one of the worst for any G7 nation. We also had the spring economic update released by the Liberals, that showed increased tax revenues on higher oil prices, and a revised downward deficit from the$60B+ previously forecasted in the Fall budget.
As we move through the spring months, an item to continue to watch is how Canadian mortgage renewals are impacting the banks. 2026 will have the most mortgage renewals of any year, as both 2021 - 5 year mortgages, and 2023 - 3 year mortgages renew this year. How much of an increase will owners feel on the rate increases and how much can the big banks, and smaller lenders absorb while Canadians seek to pay their bills and keep their homes. The other trend in the sector, is new construction homes/condos not being able to clse on current valuations. The pre-construction homes were sold, without financing and now lenders wont lend the balance owing as the values of the homes has decreased significantly. This leaves buyers forced to renegotiate with builders, find other sources to come up with closing funds or walk away from their deposits. This does finally present new buyers with an opportunity to get into the condo market as prices are down 20-50% in various markets across the GTA.
We have all seen the price of gas at the pumps the past month, and while the federal carbon tax was reduced on fuel mid April, it's hard t absorb the increased costs for many families that are already struggling. Another item to keep an eye on, is how long these higher prices last, and will it trickle into the rest of the economy to impact inflation.
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