What's Happening Q3 2026

The Quarter in Brief

Q3 brought back almost everything markets had just stopped worrying about: oil near $100, the first Fed rate hike since 2023, and a full breakdown in Canada–U.S. trade talks. Yet the TSX set repeated records, and the S&P 500 held near its highs, carried by strong earnings and a resilient economy. The question now is whether markets are being resilient or complacent, a theme we'll continue to watch closely.

Markets and the Macro

Canadian equities extended their winning streak, with the TSX 60 up 1.6% for the quarter and 19.8% over the past year. Global markets kept pace: the MSCI ACWI World Index gained 1.8% for the quarter (19.6% over one year), and the MSCI ACWI ex-Canada rose 1.1% (18.9% over one year), reflecting a broad global recovery.

Fixed income had a tougher quarter. Core Canadian bonds (XBB) fell 3.0% for the quarter and 1.2% over the past year as bond yields rose. The Bank of Canada held its policy rate at 2.25%, while inflation, as measured by CPI, came in at 2.9% year-over-year, driven largely by oil prices.

Your Pools, Your Performance

This quarter, Kinsted’s Income and Real Asset Pools did their job, holding up well as bonds declined. Over the longer term, our growth strategies continue to lead.

The Strategic Income Pool was the standout for the quarter, returning 1.3% against a benchmark of −3.0%, an outperformance of 4.3 percentage points. Over one year it returned 4.6% versus −1.2%. The Fixed Income Pool also beat its benchmark, down 1.6% for the quarter against −3.0% (+1.4 points) and down 0.2% over one year against −1.2%. The Real Assets Pool gained 2.1% for the quarter, ahead of its Canada CPI + 3% benchmark of 1.2%, and returned 5.6% over one year against 6.2%.

On the growth side, the Global Equity Pool remains the strongest performer over one year, up 38.4% against an 18.9% benchmark (+19.5 points), though it dipped 0.8% for the quarter versus a 1.0% benchmark. The Strategic Growth Pool returned 28.0% over one year against 18.9% (+9.1 points), with a quarterly return of −1.0% versus 1.2%. The Canadian Equity Pool gained 0.6% for the quarter, trailing its TSX 60 benchmark of 1.6%, with a one-year return of 15.2% against 19.6%.

The Deeper Read

United States: Strong Economy, Stubborn Prices

Growth stayed strong enough that the Fed felt it could tighten without breaking anything. In September it delivered its first hike since 2023, to a 3.75–4% range. That is good news for earnings and harder news for valuations. With U.S. inflation at 3.4% in August, higher bond yields have capped several rallies this year.

Canada: Talks Collapse. The TSX Doesn't

Last quarter Canada debated recession; Q2 GDP then grew 3.3%. The Bank of Canada held at 2.25% but turned more hawkish as inflation reached 3% in July. Then trade talks broke down. The U.S. imposed 50% tariffs on C$27.6 billion of Canadian goods, Ottawa matched them, and the TSX closed at a record the same day.

The Outlook: The Price of Money

Last quarter we said companies simply needed to deliver. They did, but the bar moved. Higher rates make every dollar of future earnings worth less today, so valuations matter more. Key dates ahead: the Bank of Canada's October 28 decision and the threatened January 1 jump in U.S. auto tariffs. Patience and diversification still pay.

Where We See Opportunity

Our private markets strategies are built for a world where rates stay higher for longer.

When money costs more, contractual and inflation-linked cash flows earn their keep, and these strategies are priced off today’s rates, not yesterday’s. In private equity, exits are improving but the backlog remains, so we favour mature, cash-generating companies in industrials, defence suppliers and healthcare services, and we’re selective on software. Essential infrastructure, backed by inflation-linked contracts, suits a world of hotter prices.

Our focus there is power generation, grids and storage to meet data centre demand. Asset-backed financing offers floating-rate, collateral-backed loans that earn more as rates rise, and we prefer equipment, infrastructure and specialty finance over crowded sponsor lending. In secondaries, a record U.S.$124 billion traded in the first half of the year, yet distributions remain scarce and NAV discounts persist. We see the most opportunity in private credit and infrastructure secondaries, the newest growth areas in that market.

Disclosures and Disclaimers

© 2026 Kinsted Wealth. All rights reserved. Opinions and estimates are written as of the date of this report and may change without notice. Any commentaries, reports or other content are provided for your information only and are not considered investment advice. Readers should not act on this information without first consulting Kinsted Wealth, their investment advisor, tax advisor, financial planner or lawyer. This communication is intended for Canadian residents only and does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer is not allowed. Kinsted Wealth's advisory services are available only in those jurisdictions in which Kinsted Wealth is registered to provide such services. Past performance does not guarantee future results.

Kinsted Wealth is a privately owned and independent Portfolio Management firm, registered as a Portfolio Manager, Investment Fund Manager, and Exempt Market Dealer with the Alberta Securities Commission as its principal regulator.

Sources

[1] TASS. Price of Brent Oil on ICE Up Over 8% Amid Situation in Middle East. July 2026.

[2] JM Financial. Brent on the Brink of $100 per Barrel. September 2026.

[3] MUFG Research. September 2026 FOMC Recap. September 2026.

[4] Südostschweiz. Fed Zinsentscheidung: Uhrzeit und Livestream. September 2026.

[5] Euronews. Canada Hits Back With New Counter-Tariffs on U.S. Goods. August 2026.

[6] Reuters. Canada's Retaliatory Tariffs Take Effect as U.S. Trade Talks Stall. September 2026.

[7] Stockchase. TSX Hits Record High Amid Trade War. August 2026.

[8] CTV News. Bank of Canada Holds Key Rate at 2.25% Once Again. September 2026.

[9] CREA. Bank of Canada Holds Rate at 2.25% as Inflation Risks Rise. September 2026.

[10] The IPO Window Is Open, but Market Liquidity Is Doing More of the Work. 2026.

[11] Lazard. Interim 2026 Secondary Market Report. August 2026.

[12] Brookfield. Brookfield Super-Core Infrastructure Partners Q2 2026 Performance Report. June 2026.

Regards,
Kinsted Wealth