MLD Wealth Management · Canaccord Genuity Wealth Management
The first quarter was about markets absorbing a shock. The second was about how fast they forget one. April started with everyone still watching the Middle East, and by the end of June we had come through one of the strongest quarters in years. Once the Strait of Hormuz reopened, the war premium came out of oil and money went straight back into artificial intelligence.
The good news is that earnings did the work this time, not multiple expansion. The less good news is how few companies were doing that work. The broadening we were happy about in Q1 went into reverse. Technology ran away with the quarter while energy, materials, utilities, staples and communication services all finished lower.
Here is the awkward part. Oil fell and inflation kept climbing anyway. That is the earlier energy shock still working its way through the system, and it takes longer than people expect. U.S. inflation is running closer to 4% now, and the stickiest part of it sits in services, which is the part central banks have the least control over.
The Fed sat on its hands in April and June, but the tone changed. So did the market. A year ago investors were counting on a series of cuts in 2026. Now the conversation is about whether we get a hike or two instead. That is the tension right now. Stock markets are priced for an earnings boom. Bond markets are priced for a policy problem. Somebody is wrong.
AI is getting broader on the inside and narrower on the outside. Leadership has moved down the supply chain into the equipment makers, the memory companies, and the power and grid businesses that keep all of it running. The interesting question is no longer whether AI is real. It is where the money gets made next, as the industry shifts from training models to actually running them, and from selling shovels to selling something a customer uses every day.
Inflation is the bigger risk, not the bubble. People have called the top on AI twice in the past year and been wrong both times. While everyone argued about that, rates quietly repriced. And the AI buildout is adding to inflation right now, because all that spending and all those bottlenecks come first. The efficiency gains show up later.
The gaps underneath are widening. The consumer is splitting in two. The top end is fine. Below that, it is getting harder. You see the same thing across companies, where balance sheet strength and the ability to raise prices are separating one group from another.
We got the inflation call right and we were early on how we played it. Owning energy, materials and real assets was the wrong place to be in a quarter when oil fell and technology took off, and it cost us on a relative basis.
Two things are worth saying plainly. Our gold position has turned sharply in our favour since the quarter ended and is doing exactly what we owned it to do. These things tend to pay on their own schedule, not the calendar's. And we are staying with the energy thesis. The supply and demand picture that got us interested has not changed. The timing did. Early and wrong are not the same thing, and we would rather sit through a quiet quarter than try to buy the position back after everyone else has figured it out.
Elsewhere we have spread out a bit, adding to financials, health care and some consumer discretionary. Inside technology we have leaned toward software infrastructure and cybersecurity instead of chasing the most crowded corner of the semiconductor trade. That corner got very extended in May, and extended is usually a reason to trim rather than a reason to add.
We are still constructive, just with a shorter leash. Earnings are real and a recession still looks unlikely. What has changed is where the risk lives. It used to be growth. Now it is rates. If the market has the Fed wrong, the pain shows up in the most expensive and most crowded names, which happen to be the ones that produced most of the last three months of returns.
We would treat some volatility from here as normal and maybe even healthy. The cycle keeps changing character. The discipline should not.
Market and index data as at June 30, 2026; portfolio commentary reflects positioning as at the date of writing. This commentary is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Past performance is not indicative of future results. MLD Wealth Management is a trade name of Canaccord Genuity Corp., Member, Canadian Investor Protection Fund.