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North American capital markets have been witnessing choppy markets since the beginning of November as investors moved from one concern to another in a short span of time. From worries around impact of extended government shutdown on the state of the economy to if the United States Federal Reserve delivered a rate cut on December 10 th , the date for Federal Open Market Committee (FOMC) meeting, to if the extent of capital expenditure done to build the artificial intelligence infrastructure will eventually yield results for companies have kept investors on toes. Any company taking on leverage to build out artificial intelligence infrastructure has been punished. In addition, any company across the artificial intelligence value chain failing to even slightly meet the lofty investor expectations has been met with increasing scepticism in the recent weeks. We do not doubt the transformational power of the technology and think the value will become more apparent as the industry and technology matures over time and starts to showcase more use cases and productivity benefits. That said, we think the markets will begin to differentiate between artificial intelligence winners and losers in 2026. Given the major players put on this litmus test are also the heavy weights in the indices; the choppiness at the index level is more likely to continue, in our view. Further, the recent weeks have also seen rotation away from the heavy weights to the laggards in the index. The broadening of markets is generally a good sign for the bulls. That said, for the index laggards to continue to play catch-up they will also have to demonstrate earnings growth. Declining interest rates could help to bring the interest expenses down; however, the ability to pass on the tariffs will differentiate between companies’ ability to protect margins. Tariffs have largely stayed in place and thus far companies have largely decided to not pass on tariffs to customers in expectations of a resolution. Going forward, this is likely to change as many companies reach their limits to not pass on the tariffs. Even if the Supreme Court rules tariffs as illegal, the Trump administration will try to figure out other ways to collect levies. This will keep policy uncertainty elevated. Another dynamic keeping policy uncertainty elevated is guidance from the Central Banks. On the 10th of December, the Bank of Canada kept policy rates unchanged at 2.25% and guided to hold rates steady in line with market expectations. The United States Federal Reserve delivered a 25 basis-points cut on December 10th,  also in line with expectations, however, market expectations witnessed unusually large variations from the 29th of October (the previous meeting and guidance date) to the 10 th  of December (See Figure 1) (from ~68.9% on October 29, 2025 to ~29.3% on November 19 th , 2025 and then back to 93.4% on 10 th  December 2025). In other words, the markets are anticipating higher policy uncertainty in the United States as relative to Canada. Figure 1:  %Cut implied by Fed Funds Futures (US) and Overnight Index Swaps (Canada) Source: Bloomberg Overall, we think selectivity will be the key to navigate the uncertain set-up of 2026. Leaning on the recent trends in markets, the ability of laggard companies to meet expectations of earnings growth and the ability of the companies in the artificial intelligence value chain to demonstrate tangible value amid the uncertain policy backdrop will differentiate between winners and losers in 2026, in our view.   Vipul Arora is a Portfolio Manager with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact him at 613-258-1997 or visit ofarrellwealth.com  to discuss your circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. Insurance products and services are provided through Assante Estate and Insurance Services Inc

After ignoring the risks from the government shutdown for a long period, the North American capital markets finally appeared on a shaky ground after the United States’ government shutdown entered its longest run. Historically, the markets have largely ignored the government shutdowns as they typically get resolved before they begin to cause lasting damage to the economy. However, the current shutdown carrying on beyond the 35 days (previous record) put together with air travel disruptions reaching a critical stage and on top of disruption of several key economic data releases which investors and Fed officials rely on to take decisions added to investors angst during the past few weeks. While the extended government shutdown finally tested the investors patience, a few other concerns too have been building for a while. The chatter on whether Artificial Intelligence related stocks are in a bubble territory has been building for some time after their continued advance over the past few months. This was compounded by statements from leadership of a few banks, who during their third-quarter earnings releases said that they think a few areas of Artificial Intelligence related stocks have frothy valuations. We think high valuation alone can bring about some volatility; however, is not the reason enough to derail the bullish momentum in equities. As per Bloomberg data, the earnings-per-share for S&P 500 Index is expected to increase by ~+12.9% for the year 2026; while the earnings-per-share for the Bloomberg Artificial Intelligence Total Return Index is expected to increase by ~+23.9% for the year 2026. In other words, the relatively higher valuation of Artificial Intelligence companies has justification in their earnings story, in our opinion. We think the policy rates trajectory from the Central Banks remains a tailwind for capital markets and should continue to be constructive for the markets. The bond yields had been declining in anticipation of a policy rate cut for the most part during the month of October up until the announcement of a rate cut decisions on 29 th  October by the United States Federal Reserve and Bank of Canada. On the decision date both the Central Banks cut policy rates by 25 basis points. The Bank of Canada reduced the policy rate to +2.25% from +2.50% and the Federal Reserve reduced the policy rate to +4.00% from +4.25%. Despite getting the cuts as expected, the bond yields advanced after the announcement of rate cut decisions as both banks downplayed on the expectations of further rate cuts. Tiff Macklem, the governor of Bank of Canada, said that policy rates are low enough to stimulate the economy; while Jerome Powell, the chair of United States’ Federal Reserve, said that ‘further reduction in the policy rate at the December meeting is not a foregone conclusion’. (See Figure 1) Figure 1: Bond yields advanced after rate decisions Source: Bloomberg Notwithstanding the hawkish tone, we note that the United States Federal Reserve will end the process of shrinking its Balance Sheet as on 1 st  December; and while the data remains scant; the evidence continues to point towards still weak labour market. Inflation has been creeping up for past few months; however, it is likely that Federal Reserve stays more tolerant of higher inflation to support the economic growth. Further, any resolution to reopen the government will alleviate any immediate concerns from investors. As of this writing, the US Senate had made progress towards ending the shutdown. We think the current balance of risks continues to point towards a constructive environment for the risk assets. Source: Bloomberg Vipul Arora is a Portfolio Manager with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact him at 613-258-1997 or visit ofarrellwealth.com to discuss your particular circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. Insurance products and services are provided through Assante Estate and Insurance Services Inc

The month of September defied the expected seasonality of typically being a weak month of the year and both equity and fixed income asset classes witnessed positive performance for the month. The S&P 500 Index and the S&P TSX Index were in green by ~+4.25% and ~+4.92%; respectively, while the aggregate fixed income indices were up by ~+1.33% in the United States and ~+2.29% in Canada. The risk assets rallied in anticipation of the start of a policy rate cut cycle after a long pause on both sides of the border. The Central Banks did not disappoint investors as the Bank of Canada reduced the policy rate by 25 basis-points from +2.75% to +2.50% and the United States Federal Reserve also reduced the policy rate by 25 basis-points and brought the policy rate down from +4.50% to +4.25%. The expectations of the start of the rate cut cycle had been building after the United States’ Federal Reserve chairman, Jerome Powell, had indicated at the annual Jackson Hole economic symposium, that downside risks to employment are rising and the shifting balance of risks may warrant adjusting the policy stance. The unemployment rate in Canada has been persistently on a rise and has increased from +6.6% at the start of the year to +7.1% during the month of August (reported in September). Relatively, the unemployment rate in the United States has not increased at a similar pace and has increased from +4.0% at the start of the year to +4.3% during August (reported in September) (See Figure 1). However, it is noteworthy that the crackdown on the immigrant workers in the United States has complicated the proper measurement of the unemployment rate. As immigrant workers drop out of the work force, they do not form part of the calculation of labour force, and this conceals the true weakness in labour market. During the press conference after the Federal Open Market Committee meeting on the 17 th  of September; Jerome Powell acknowledged that the headline unemployment number perhaps does not indicate the true extent of labour weakness and though the inflation has not yet reached the desired target of +2.0%; the balance of risks have shifted to warrant policy rate adjustment. The Federal Reserve chair also said there is no risk-free path for the bank’s next moves as inflation is still elevated. Figure 1: Unemployment rate has been increasing steadily Source: Bloomberg We note that there is indeed ‘no easy path’ for the United States’ Federal Reserve as inflation and unemployment are not the only worries the country must face. Due to the US government shutdown, the Bureau of Labour Statistics does not have the manpower to collect data and provide estimates of several key economic releases that feed into forming views of the members on Federal Reserve’s board. These include important datapoints such as non-farm payrolls, initial jobless claims, and the consumer price index. The risk to the independence of Federal Reserve have been well discussed and risks spooking the fixed income investors at a time when yields are already high and the United States national debt is at an all time high of ~$37.8 trillion. Lisa Cook, a Fed board member, who has been targeted by the US President on accusations of mortgage fraud; has managed to get a stay on her firing until January. Stephen Miran, a Trump appointee to the Fed’s board after a member resigned, voted for a 50 basis points cut at the September meeting while the rest of members voted for 25 basis points. Investors are viewing the appointment of Stephen Miran on Fed’s board of governors as a step towards exerting greater influence of the White House on the US Federal Reserve’s decisions. Overall, the Federal Reserve appears to be facing challenges on many fronts. Nevertheless, we think the Central Banks cutting policy rates in a slowing but still growing economy put together with still robust earnings expectations for the year 2026 continue to bode well for the risk assets performance in the foreseeable future. We also think developments around Federal Reserve losing its independence, flaring up of geo-political tensions, companies’ guidance for the 2026 outlook during the third quarter earnings season; and/or resurgence of trade wars are the risks to be monitored in an increasingly volatile world. Source: Bloomberg, Bureau of Labor Statistics Vipul Arora is a Portfolio Manager with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact him at 613-258-1997 or visit ofarrellwealth.com to discuss your particular circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. Insurance products and services are provided through Assante Estate and Insurance Services Inc

Event Registration Form < Back This event is now over. Please visit our Community page to see other upcoming events! INTERGENERATIONAL ESTATE PLANNING Steps, Tools & Strategy! Over the next 10 years, $750 Billion is estimated to be transferred in Canada from Boomers to their descendants. In this webinar you will learn some of the most important strategies that can help you reduce taxation and give you piece of mind that your affairs will be taken care of correctly. You will learn the 5 Effective Steps to estate planning, including how to set goals, and how to identify the right executor or guardian(s) for minor children. Join us for this information packed webinar co hosted by Daren Givoque, Financial Advisor at O'Farrell Wealth & Estate Planning, and Jacqueline Power, Assistant Vice-President, Tax and Estate Planning Mackenzie Investments. RSVP WEBINAR First Name Last Name Email Phone By checking this box you agree to allow us to contact you regarding the webinar. Should you wish to discontinue, you may contact us to withdraw your consent at any time. Your personal information will not be distributed, sold, or traded – it will remain strictly confidential and will only be used for the purpose for which it was provided. For more information on Assante’s commitment to privacy and responsible use of information, please visit www.assante.com/privacy-policy Submit Thanks for submitting! Sorry! Registration for this event is closed.

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