Oil in the crosshairs The U.S.-Israel war with Iran has disrupted global oil supplies and rattled markets, pushing oil prices into triple digits. While the global economy remains solid, this crisis creates near-term uncertainty for investors. Here are the key takeaways from this month's economic update: War with Iran drives oil prices higher: The recent oil shock is creating both inflation pressures and economic growth concerns. But there’s good news for investors: similar events in the past have typically proven temporary. Also, the world economy is less dependent on oil than during the 1970s crisis, meaning the pain should be more modest. (Regional impacts may vary significantly.) Stock markets retreat while bond yields rise: Markets have sold off on war concerns, but this creates opportunities for long-term investors. Stock valuations have improved from expensive levels to near fair value globally, and international markets now look somewhat cheap. Earnings outlook remains strong. AI continues rapid advancement but raises questions: AI models are improving exponentially – about 6 times better per year – while return on investment is actually rising. Most likely outcome: significant productivity gains with some worker displacement, but not mass unemployment. Trade deal uncertainty persists: The USMCA renewal faces delays, with resolution more likely in 2027 than this year. Uncertainty may hold back business investment in Canada. Most likely outcomes are either a good deal with lower tariffs or maintaining the status quo. Inflation pressures building temporarily: Energy-driven inflation is picking up, creating a dilemma for central banks. Do they hike rates due to inflation or cut rates due to economic weakness? Bottom line: The economy remains on solid ground despite war-driven shifts. While oil prices create near-term headwinds and stock markets have been choppy, the shock should prove temporary. Strong earnings provide a foundation for continued growth. Investors should expect more ups and downs but improved valuations offer opportunities for those with a long-term perspective. All this and more in this month's webcast.