Canadian investors found it difficult to beat last year, when
increased by 28 percent.
It was the second-strongest gain this century and outperformed the S&P 500, which ended the year up 17 percent.
Somehow this managed to happen amid the trade turmoil unleashed by the US.
fears the economy will plunge into recession and political instability.
“The key question for investors now is whether equity markets can deliver a fourth year of positive returns,” the investment firm said.
in its market update this week.
Strategists are optimistic: both Edward Jones and
predicting the potential for stock markets to rise again this year.
“Canadian equity valuations are above the long-term average, but are far from bubble territory,” wrote Christopher Harvey, head of equities and portfolio strategy at CIBC.
“Importantly, tight investment grade credit spreads are a positive sign for earnings per share growth. Combined with capex tailwinds driven by data center construction and government infrastructure priorities, we are seeing double-digit earnings per share growth, supporting above-market multiples.”
CIBC forecasts the TSX will reach 35,200 in 2026, up 11 percent from its December 31 close. The S&P 500's target range stands at 7,790, up from 6,846 at the end of the year.
Valuations have soared in 2025, but this year “earnings growth will be king,” Edward Jones said.
They also expect double-digit earnings growth across all 11 Canadian and U.S. equity sectors, with Canada's growth rate expected to be 15 percent.
Improved economic conditions will play a role. Edward Jones expects GDP growth to rebound to around 2 percent by the end of the year as trade tensions ease, employment picks up and interest rates remain supportive.
“With trade disputes out of the way in 2025, the Canadian economy is poised for recovery once fiscal stimulus takes effect,” the report said.
Although
the rate is expected to remain at 2.25%.
should continue to gradually reduce the rate to 3-3.5%, which will support stock markets, they predict.
Edward Jones' base case scenario is that markets will be supported by robust economic growth, stable interest rates and rising corporate profits.
But at this point in the cycle, diversification becomes even more important, strategists say. He favors large-cap U.S. stocks exposed to AI and mid-cap stocks focused on cyclical sectors. He also recommends exposure to global markets in emerging markets, which could benefit from Fed rate cuts, as well as small- and mid-cap stocks in developed markets overseas.
In Canadian stocks, Edward Jones is overweight in the Materials, Industrials and Energy sectors.
CIBC ranks financials first with a weight of 33.2%. His favorites for the sector include Bank of Montreal, Great-West Lifeco Inc, Toronto Dominion Bank and Brookfield Asset Management.
Next come materials with a weight of 17.7%. Gold, silver and copper feature prominently in the rankings, which include Capstone Copper Corp., IAMGOLD Corp., Kinross Gold Corp., Franco-Nevada Corp., Pan American Silver Corp. and Nutrien Ltd.
The leaders in Energy stocks with a share of 14.9% are Suncor Energy Inc., Kelt Exploration Ltd., Keyera Corp. and Williams Companies Inc.
Industrials with a 10.6% share include TFI International Inc., AtkinsRealis Group Inc. and CAE Inc.
Shopify Inc, Constellation Software Inc. and Docebo Inc. are the favorites in the IT sector, with a weight of 9.8%.
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Toronto
We ended the year the same way we started – with a whimper.
The number of homes sold in Canada's largest city fell 0.4 percent in December from the previous month, while the benchmark price fell 0.7 percent to $962,000, according to seasonally adjusted data.
Toronto Regional Real Estate Board (TRREB)
showed on Wednesday.
The decline was part of a trend seen throughout the year. Total sales in 2025 were down more than 11 percent, and benchmark prices fell more than 6 percent.
Last February, TRREB predicted sales would grow 12 percent in 2025. Instead, activity was the lowest in the Greater Toronto Area since 2000.
Only sellers remained in effect. Active listings grew 10.5% year over year, with the number of new listings reaching its highest level since 1980.
- Today's data: Canadian international merchandise trade, US wholesale trade, consumer credit, non-farm productivity and trade balance
- Earnings: Aritzia Inc., Tilray Brands Inc.
- Canada has problems: here are the noteworthy tech startups trying to solve them
- Howard Levitt: 7 Tips for Employers to Survive in 2026
- How to Make a Million a Year Playing Disc Golf
Rich Barber author David Chilton is back, and this time he's updated his best-selling personal finance book for today's young Canadians, more than 30 years after it was first published.
Generation Z and Canadian millennials face different financial challenges than previous generations, including homeownership unaffordability and income uncertainty, making managing finances seem impossible for some.
In an interview with the Financial Post, Chilton talks about how young Canadians can take control of their finances and prepare for a successful savings strategy in 2026 and beyond, despite the financial circumstances they may face.
Interested in energy? FP West's subscriber-only newsletter, Energy Insider, brings you exclusive reporting and in-depth analysis of one of the country's most important sectors.
McLister on mortgages
Want to learn more about mortgages? Mortgage strategist Robert McLister
can help you navigate a complex sector, from the latest trends to funding opportunities you won't want to miss. Plus check it out
for the lowest national mortgage rates in Canada, updated daily.
Financial post on YouTube
Visit Financial Post
for interviews with Canada's leading experts on business, economics, housing, the energy sector and more.
Today's Posthaste was written by Pamela Haven with additional reporting by staff from the Financial Post, The Canadian Press and Bloomberg.
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