QUEENSBURY GROUP
OUTLOOK
December 2025
Most of us have experienced the anxiety or even fear which arises when the car in which we are a passenger makes a sudden, unexpected turn. The inertia of our previously forward motion now throws us sideways and our brain contemplates whether we will stay on the road or even roll over. Nobody likes a sudden change of direction. In 2025, we experienced such a change of direction in global politics, economics and arguably even societal norms. While change can be disruptive and disturbing, it now seems apparent that our car is not rolling over or even leaving the road. We can relax a little bit but what lies ahead?
The trend towards globalization began after World War II with the US leading the way in trade liberalization aided by the General Agreement on Trade and Tariffs (GATT) established in 1948. GATT eventually evolved into the World Trade Organization in 1994. This period also saw the creation of many large multinational corporations with which we are familiar today. Thanks to GATT, the average global tariff dropped from 22% to 5% during this time. Globalization accelerated further during the 90’s with the fall of the Soviet Union and advancements in technology greatly improving communication and information flows. Individuals — not just nations and corporations — became more connected with the rest of the world. Today, we order goods and services online from around the world as easily as going to the corner store.
Stein’s Law, coined by the economist Herbert Stein in 1986, states that if something cannot go on forever, it will stop. Note that this is not considered a theory; it is a law. It would appear the globalization trend has run into Stein’s Law. Tariffs, geopolitical isolationism, and even colonialism are making a resurgence while US exceptionalism may very well be on the wane. It appears that this could be a fundamental change of direction which is unlikely to revert regardless of the outcome of the US mid-term elections or even the next presidential election.
The results of this change are likely to be reflected in the economy and markets of 2026 but North America is poised to see two very different economies. In Canada, we can expect slower economic growth, higher unemployment, a lower dollar and lower interest rates as the effects of US tariffs take hold. We can only hope that a renewal of CUSMA will mitigate any potential damage but this is certainly not something to count on. Watch for continued market gains in interest rate sensitive sectors. The US, on the other hand, will see the opposite as industries take advantage of a protectionist policy. Strong growth and lower unemployment will, however, be countered by creeping inflation and potentially higher interest rates. Technological advancements in AI will continue as companies struggle to access sufficient computing power to keep up. This circular growth pattern will continue as advances in AI simply make it easier to develop even further advances. Where this all ends in anyone’s guess.
Change is stressful and 2025 has been a very stressful year for many. Accepting change not only reduces stress but allows one to identify opportunities on the new road ahead. We wish everyone smooth driving through 2026.
It is important to consult with your financial advisor to confirm that security suitability is in keeping with your personal investment objectives and levels of risk tolerance and capacity.
| Cdn | GOC | |||||
| S&P | S&P | Bank | 10 yr | Cdn | ||
| Levels | DJIA | 500 | TSX | Prime | Bonds | $ |
| Current | 48,222 | 6,896 | 31,790 | 4.45% | 3.43% | 72.87 |
| Dec 2024 | 42,580 | 5,906 | 24,705 | 5.45% | 3.24% | 69.48 |
| Dec 2023 | 37,725 | 4,781 | 20,934 | 7.20% | 3.11% | 75.60 |
| Dec 2022 | 33,220 | 3,849 | 19,485 | 6.45% | 3.29% | 73.74 |
| Dec 2021 | 30,336 | 3,727 | 17,543 | 2.45% | 0.70% | 78.03 |
Queensbury Securities Inc
December 31st, 2025
John Webster, President
