AXION Professional Accountants

Impact of worldwide financial decisions on our economy and businesses.

Global equity markets started 2026 well. However, several global indices ended the first quarter with negative returns. Canada and Japan bucked this trend for different reasons. In Canada, positive returns were due to its large energy sector weighting. In Japan, positive returns reflected enthusiasm around its pro-growth mandate.

Prior to the conflict involving Iran, many positive things were happening globally. Economic indicators had improved, corporate earnings revisions turned positive in many parts of the world, and stock market performance had broadened to more sectors. Corporate earnings were revised higher across most geographic regions, with Europe being the notable exception.

Eurozone business activity accelerated faster than forecast in February as manufacturing returned to growth for the first time since October. The Bank of Japan’s quarterly Tankan survey, a measure of manufacturer optimism, reached its highest level since Q4 2021. The global Purchasing Managers Index also turned up in the early part of 2026.

Our base case is that the war with Iran will be short-lived. President Trump has shown a tendency to respond to market stress, and U.S. midterm elections in the fall provide an added incentive for him to de-escalate the conflict and reach a resolution. We are monitoring the situation carefully and will make portfolio adjustments as needed.