Iran and Israel continue to exchange strikes despite Trump’s latest 10-day extension on attacks targeting Iranian energy infrastructure, highlighting the limited impact of the pause on the trajectory of the conflict thus far. Against that backdrop, Canadian and U.S. equities are poised to open lower again this morning, with risk sentiment remaining cautious. Yesterday’s selloff pushed the Nasdaq into correction territory from its late-October peak, while the S&P 500 closed at its lowest level since September 2025. In Canada, the TSX fell -1.53%, erasing earlier gains and leaving the index flat year-to-date, as higher oil prices, rising yields, and ongoing geopolitical uncertainty continue to weigh on markets.
He-said, she-said, finger-pointing, and alternating signals of de-escalation and escalation continue to cloud any sense of progress toward a ceasefire. Just yesterday, Donald Trump was non-committal on extending the negotiating window while claiming Iran was “begging to make a deal,” only to later extend the deadline by 10 days and pause attacks on Iranian energy infrastructure, citing that talks were going “very well”. This dual-track approach, pairing diplomacy with military buildup, widens the credibility gap between rhetoric and reality, with limited clarity from Washington on the scope or endgame of the conflict. The result is investor skepticism around any near-term resolution. Oil continues to grind higher, with Brent pushing above $111, while equities and bonds remain under pressure amid rising yields and weaker risk appetite. The longer the conflict drags on without credible progress, the more markets begin to price in a sustained macro shock, where higher energy prices feed inflation, delay rate cuts, and keep volatility elevated.
In its latest outlook, the Organization for Economic Co-operation and Development (OECD) is flagging a shift back toward inflation risk, raising forecasts across major economies as war in the Middle East tests the global economy. The G20 2026 aggregate inflation forecast is now 4% while Canada and the U.S. sit at 2.4% and 4.2% respectively. Global growth for 2026 remains relatively steady easing to 2.9%, before edging back up to 3.0% in 2027. The OECD forecasts suggest central banks should remain cautious and delay easing, with the possibility of further tightening to anchor expectations. Governments should avoid broad stimulus and instead use targeted, temporary support to manage energy-driven shocks. The broader takeaway is a more fragile backdrop, where higher energy prices risk creating a stagflationary mix of sticky inflation and softer growth, increasing the likelihood of higher-for-longer rates and potential market repricing if the shock persists.
It’s complicated. Kevin Warsh’s plan to shrink the Fed’s $6.6 tln balance sheet is a lofty goal. Experts are noting that it would be a complex, multi-year effort that could take up to five years and extend beyond a single term. Achieving this would require structural reforms such as overhauling bank liquidity rules, redesigning the payments system, and reducing banks’ reliance on reserves held at the Fed, where roughly $3 tln currently sits. While some measures like increased use of open market operations or adjusting interest paid on reserves could be implemented relatively more fundamental changes would require coordination across regulators and banks, along with extensive testing. Warsh has argued that shrinking the balance sheet could create room for rate cuts, but the scale and complexity of the task highlight that any meaningful shift in Fed policy framework would be gradual rather than immediate.
Sorry for the math talk on a Friday. The S&P 500 Index is in its worst stretch in a year with four straight weekly declines, and technical analysts are looking to the 50% Fibonacci retracement level (an 800-year-old math-based tool) as a potential guide for where the selloff could bottom. The magic number seems to be around 5,980, roughly 8% below current levels. Nearer-term support may come around 6,200, but the break below the 200-day moving average suggests further downside risk, especially with macro pressures like the Iran war driving oil higher, inflation concerns, and uncertainty around central bank policy. While Fibonacci levels have coincided with past market bottoms (like in 2020 and 2022), strategists stress they’re only one piece of the puzzle, and a sustained rebound likely depends on external catalysts, which include easing geopolitical tensions and stabilization in energy prices.
Liquidity pressures in private markets are becoming more visible as investors look to access capital from private credit funds, with roughly $4.6 billion still pending and about two-thirds of the ~$13 billion requested this quarter returned. As inflows slow amid macro stress (mostly war-driven volatility and higher rates), more investors are seeking liquidity at once, creating a feedback loop where redemption limits deter new capital and put further pressure on funds. Large managers, including Apollo Global Management, Ares Management, BlackRock, and Morgan Stanley, have applied standard quarterly redemption limits of around 5%, reflecting the inherent trade-off between liquidity and the underlying structure of private credit portfolios. In contrast, Oaktree Capital Management has chosen to meet all redemption requests for its retail-focused fund, allowing withdrawals of 8.5% of net assets, with support from parent Brookfield Corp. The divergence in approaches highlights the tension within semi-liquid structures, where investor demand for liquidity is meeting the constraints of less liquid underlying assets, leaving outcomes likely dependent on how flows evolve from here.
Let’s play ball! It’s Opening Day at Rogers Centre, and it’s going to look and feel a little different this year. The Toronto Blue Jays return home tonight and will raise their 2025 AL banner and kick off a 50th season that balances celebrating the past with excitement for what’s ahead. The last time fans packed the dome was for Game 7 of the World Series, a result that still stings for some heartbroken fans (Launch Pad writers included). That’s what makes tonight matter. Call it baseball therapy. It’s a chance to honour the magical 2025 run, take in the renovated park, and let some of that pain turn into anticipation for the season ahead. This is a team with momentum, a clubhouse that believes, and a fan base ready to go all-in… again. Expectations are high, and even with some CBA noise in the background to distract fans and players, Jays’ President and CEO Mark Shapiro said it best, there’s no point worrying about what might happen months from now. Let’s take his sage advice and stay in the moment and see how far this group can go. As a bonus, Chipotle Canada is offering BOGO for fans wearing Blue Jays gear. Consider it your first win of the season.
Diversion: She’ll never hear the end of this
