FidelityConnects: Jurrien Timmer – The global macro view January 26, 2026

Start your week with leading analysis in your corner. Join Jurrien Timmer, Fidelity’s Director of Global Macro, to better understand what’s moving the markets around the world and to be better prepared for what may be next.

Transcript

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Hello, and welcome to Fidelity Connects.

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I'm Pamela Ritchie.

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In a post-COVID world traditional market cycles

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don't really look the way they used to and the old playbook

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may no longer apply.

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Are market cycles actually broken?

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One explanation our next guest raises is that

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perhaps Canada doesn't have an inflation problem

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but we have more of an affordability problem, which

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changes perhaps how we think about corporate spending,

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stimulus and government debt.

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How do we navigate this new landscape that is upon us

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and what could change that narrative ultimately?

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Very happy today to be joined by Fidelity's Chief Investment

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Officer and portfolio manager, Andrew Marchese,

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for our discussion on where equity markets are today

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and what could drive them in the new year.

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We hope you'll join us in either official language, French

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audio interpretation is here with us.

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Andrew, great to see you. Happy New Year.

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Great to see you. Happy New Year as well.

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Very glad to have this conversation with you here today.

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Let's begin with that discussion of market cycles.

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It's often something at the beginning of the year you will

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have an opinion of, talk to us about where we are.

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What is messing with it at this point?

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For those who have heard me speak I think over the course of

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the last year I've been working with a hypothesis that

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largely due to the amount of stimulus in the monetary

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system which goes back to the global financial crisis and

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beyond, the amount of capital kicking around there is

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enormous. What it's actually doing is

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it's changing the boom-bust nature of

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both local, so let's call it a

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country or regional economy, and a more broader global

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economy. We don't have the boom-bust cycles that we

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have had historically.

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Now, a garden variety kind of economic cycle, think of

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a recessionary cycle that typically lasts anywhere from

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5 to 10 years, the early '80s and

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the early '90s would be kind of symbolic

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of that.

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The last cycles have been really caused by exogenous events

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or too much speculation, too much debt and we keep

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curing those problems with more stimulus.

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So COVID.

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COVID was a big one.

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The global financial crisis was another one.

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We've never extracted the capital out of the system.

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It just keeps growing.

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That has an effect of now we go through

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periods of time where we're oscillating

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around 50, both expansion and contraction

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in both manufacturing and service metrics,

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not only in the United States but globally.

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The market's paying more attention to the

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rate of change or a positive or negative inflection

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as opposed to necessarily the magnitude of change which was

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more commensurate with those cycles in the

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'80s and '90s. You would have a recession, you would have

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global profits recessing as well and that

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would kickstart stimulus and whatnot to

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kind of cure the recession and then you would a 5

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to 10 year playbook for the market that

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would involve what leads at what point in the cycle, what

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sectors tend to do better or worse, how do profits

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kind of migrate through there, and obviously what we care

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about is how do equities behave.

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It's gotten...

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Early cycle, late cycle, mid cycle.

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Correct. Now I think we're in an environment, and we could

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be for the foreseeable future, where

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sectors that lead are not typical based on where you

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think you are in the economy and you have this

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overarching secular theme of,

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in this case, innovation.

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That would be AI.

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Industrial revolution, essentially, going on at the same

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time.

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Right, and that industrial revolution actually

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has second derivative, like increasing energy

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demand and things like this which has implications for hard

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assets like copper and silver and so on and so forth.

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All these things don't follow the traditional

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playbook. What I think it really requires us to do

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is really examine what has worked, what hasn't

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worked, what risks are either priced for

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or not priced for and where do we think better

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relative risk-returns may be in the marketplace which

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may not necessarily rhyme with history.

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That is absolutely fascinating.

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There's a lot to sort of take apart there.

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We in Canada and a lot of other countries ex-U.S.

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have pretty much come to the end of a rate cutting

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cycle. Higher interest rates there to

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fight the inflation of all that money dumped into the economy

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to get us out of COVID, for instance, most recently, so

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soaking that all up and now we're at a place that we think

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might be kind of normal or neutral depending on how you look

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at it. Again, ex-U.S.

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Should we be looking at the U.S.

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and some of these other, we'll call them developed countries,

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that have pretty much finished their rate cutting cycle, and

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the U.S. is still kind of getting going to an extent, it's

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not at the end, we don't think, are they in different places

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because of cyclically where they

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are, or in fact are you saying this is being smoothed over by

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other events?

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They're in different places from

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where they are in the rate cutting cycle.

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I'm not so sure they're that different in terms of where

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they are in their general economies.

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I think that's what makes from a macroeconomic standpoint and

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investor's reaction to what you're seeing in economic

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data a little bit more challenging because we got all this

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stimulus basically dating back

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to the second half of 2024 absent a real

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recession.

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Now, one has to ask themselves, is the AI boom and

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the capex spending associated with that actually masking

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a recession in the otherwise general economy?

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There are people who believe that. There are people who say,

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no, that's not true, even if you strip out the data you

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have a mediocre economy but you wouldn't have

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a recessionary-based economy.

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I think that's what's challenging for

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thinking about investing in the world.

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What we do care more about.

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Is the opportunities that present

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themselves globally.

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You talked about U.S. and ex the rest of the world.

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There was a big thesis that some of our global fund managers

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had last year that you could line up every

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industry, all 11 GIC sectors and

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find rest of world securities that

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were invariably cheaper than their U.S.

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counterpart.

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And that trade took off.

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And that trade took off.

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The rest of the world was cutting first and by a higher order

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of magnitude and even without the earnings

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following because the economic effect wouldn't be

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felt quite yet, it takes a little while for those interest

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rate cuts to work their way through the system, the stocks

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reacted in kind noticing that there was a valuation arbitrage

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opportunity and earnings at some point in the future should

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positively inflect.

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Therefore, the relative value, so to speak, lied in the rest

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of the world.

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I'm talking ex the AI 8 but

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you certainly saw that, as I said, in most

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GIC sectors when you compared a rest of world stock to a

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U.S. stock.

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Is that continuing, would you say?

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I think the valuation gap has

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narrowed but if you look at

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Wall Street or Bloomberg consensus earnings estimates for

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this year and next Wall Street estimates

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are forecasting in the S&P 500, yeah, 13%

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compounded earnings growth, profit growth,

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this year and next. If you look at it for EAFE it's

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closer to eight, nine.

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Then you have to ask yourself, is the valuation discrepancy

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between EAFE and the

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S&P 493, so take out the Mag 7,

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kind of justified.

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If you compare the P/E to growth of those two

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groups of stocks they're roughly comparable now.

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The biggest portion of the arbitrage opportunity

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has probably closed up.

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That being said, I think we would all concur

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that whether you're talking about the

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S&P 500 holistically, the S&P 493, the

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MSCI ACWI, I

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don't want to say the market's expensive, it's more expensive

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than historically it's been.

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I've said this for a year, actually last year I was wrong,

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you did get multiple expansion, but every

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time you expand your multiple from this point

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you're pushing on a string to a degree.

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Basically, what needs to happen is for the market to go up

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earnings have to do the lion's share of the heavy lifting.

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They have to kick in.

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Right. If that 13% I

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talked about comes to fruition, if that

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EAFE 9% comes to fruition, then

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the lion's share of the returns of the market should

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correlate to that or mimic that.

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That's so interesting. Some of the companies that

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caught that wind for all those reasons because they were

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cheaper and so on what's left in terms

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of the relative trade of perhaps different areas of

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the market? We saw certain areas of the European

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trade take off, we certainly

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saw the defence sector in areas where fiscal spending was

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going to be the greatest and so one, but there are still

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other parts of the economy that in theory things are

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going to be okay for the economy, and we'll ask you about

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that, that we could now also look.

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Some of them actually are early cycle so I was kind of asking

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you about the disconnect there.

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What else is left to take a look at?

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If you look at last year, if you do a quick snapshot of last

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year in the rear view mirror thematic investing

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kind of dominated.

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We talk about AI ad nauseam

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but the second derivative plays on that in terms of data

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centres and energy consumption.

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You talk about nuclear so you look at uranium.

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You look at copper, it's a direct drive on that.

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Copper, the commodity itself when you look at the mining

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stocks were up huge.

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Defence spending, you mentioned, another thematic basically

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based on changes that the U.S.

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is encouraging NATO to make.

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Thematic investing really dominated.

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Secondarily, if you look at post-Liberation Day

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non-profitable companies in the Russell 2000 really took

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off. There's a high degree of speculation on kind

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of new science and innovation.

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What was kind of left behind,

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and you touched upon it early cycle, if

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you go through a rate cutting cycle which started in 2024

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traditionally ...

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if you had a crystal ball in 2024 and you

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knew how many rate cuts were coming and the order of

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magnitude in the drop in rates, 200

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basis points whatever it was, you would buy the halfway mark

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in those early cycle stocks.

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What does that traditionally mean? It means banks but they

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already started taking off.

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Housing, transports, autos.

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But if you think about housing, transports, autos, they had

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fundamental negatives going on.

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Their own stories.

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Their own stories, idiosyncratic stories where the market did

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not yet feel comfortable that the bottom was in.

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Why? Each of those three groups of stocks had

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negative earnings revisions continuing until the

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end of last year. Now, sometimes the market will see through

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that but there was still a great degree or

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lack of confidence that we've actually hit a bottom in terms

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of negative earnings revisions. If you look at the rails,

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just that railroad industry, for example,

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the rail stocks have largely had eight consecutive quarters

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of negative earnings revisions.

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The market never got comfortable that the

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revisions were going to end or what they

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would actually base out at.

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But you also had that compounded by a trade

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problem with tariffs. That affects autos

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as we know, kind of in the crosshairs of that.

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In the U.S. you have a housing affordability issue.

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Despite otherwise low rates there's

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still an affordability issue there.

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Those three groups of stocks are correlated

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to the degree of about 70%.

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There's a lot of stocks that have moved.

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Those three industries in general are interesting to me.

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I'm not suggesting they're a buy right now but they're

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interesting because

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the earnings have been taken down, the valuations are

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discounted to the broader market and we're

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still in a stimulative environment.

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In the U.S. you have fiscal policy that should start kicking

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in for both businesses and consumer this half of

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the year, and then monetary stimulus which has occurred

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plus there's probably more on the come.

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If you look at that I would be more interested in early cycle

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stocks and about a general economy maybe on the margin

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getting better.

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Hello, investors. We'll be back to the show in just a moment.

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I wanted to share that here at Fidelity, we value your opinion.

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DialoguesFidelity podcasts available on Apple, Spotify, YouTube, or wherever

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else you get your podcasts. Now back to today's show.

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Let's just layer up ...

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there's so many political pieces to put to this story,

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we're trying to avoid some of them, but the

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idea of a march towards the midterms in the U.S.

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for those, many of those are so-called old

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economy and they were, in many cases,

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voters of the Trump administration in a lot of ways, sort of

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left behind story within that political story.

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Do you see stimulus going into any of those for

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lots of good reasons as we go towards the midterms in the

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U.S.? Again, as an investment question, really.

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It's an investment question but I think it's also at the

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heart of it a political question in the sense that if

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I was a politician in the U.S.

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and if I really wanted to show that I'm working

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for my people the first thing I would try to address is

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housing.

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Whether that means more stimulus, whether that means ...

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you have to manage the long end of the curve though, that

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might mean more QE. So we keep building

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up the money supply here.

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That's really interesting because that is, I mean, in a

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market that is awash with funds and is still trying to soak a

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lot of them up, the liquidity story, to suddenly have

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QE come in, which it kind of did actually, the last Fed

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announcement we heard about that, so what's that for?

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I'm gonna put on my old pharmacy hat here for a second.

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That's right, you're a pharmacist.

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When somebody's sick and they take medication sometimes you

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get side effects. The right thing to do is probably try to

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change the medication so you give a better medication to get

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a positive outcome without the side effects.

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The wrong thing to do is actually to

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take another medication to deal with the side

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effects and you just keep adding medication to the patient.

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So they go from taking one drug to five drugs.

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That's the wrong thing to do.

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I equate it to that. That's what we've kind of done with

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never taking the capital out of the system.

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So to your question, what can you do, well, you just

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fix the problem with more liquidity and

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then you manage the long end of the curve to make sure the

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long end doesn't go above 5.

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We've been oscillating in a pretty tight range here for

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months now. It's

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been well managed, credit spreads are tight,

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inflation's gotten better.

16:04.840 --> 16:07.920
All that money, M2 money supply keeps

16:07.960 --> 16:10.920
growing the way it is, eventually the inflation problem will

16:10.960 --> 16:14.000
come back again and then you've got to cure it with

16:14.000 --> 16:17.080
temporary tightening and maybe something more permanent.

16:17.080 --> 16:19.800
So let's ask a little bit about the top risks that you see.

16:19.840 --> 16:22.960
You've mentioned inflation there. Again, Bank of

16:23.000 --> 16:25.440
Canada but also lots of countries around the world, so-called

16:25.440 --> 16:28.480
developed countries, have been saying for a long time, yep,

16:28.480 --> 16:31.080
we're going to cut, still concerned about inflation but we're

16:31.080 --> 16:33.440
going to cut, and so here we are, they're at the end of their

16:33.480 --> 16:37.080
rate cutting cycles. There's now a discussion of hikes

16:37.120 --> 16:38.760
lingering. It's not there around the corner.

16:38.760 --> 16:42.040
What would you say your top

16:42.040 --> 16:44.720
risks are? I'm assuming inflation is in there somewhere.

16:45.960 --> 16:47.960
We'll start with the U.S.

16:47.960 --> 16:51.000
because it's the linchpin of everything.

16:51.000 --> 16:54.160
You could say that we're pretty much at

16:54.160 --> 16:57.320
the natural rate of interest right now, if we take

16:57.320 --> 16:59.520
a snapshot right now. Now, historically,

17:00.760 --> 17:04.480
the Federal Reserve and any central bank would

17:04.480 --> 17:07.440
overshoot to both the upside in a tightening or a downside.

17:08.440 --> 17:11.800
The market is expecting some continued cutting

17:11.800 --> 17:15.080
this year. I think if you see some weakening

17:15.120 --> 17:18.360
unemployment, as long as it's not too

17:18.360 --> 17:21.400
out of whack, that will be viewed favourably

17:21.440 --> 17:23.760
in the short term because it will give the green light for

17:23.800 --> 17:26.880
the Fed to cut but it won't be so bad as to kind of have

17:26.880 --> 17:29.680
investors think that the economy is becoming derailed here

17:29.680 --> 17:32.520
because we have priced in some success.

17:32.520 --> 17:34.960
That's one thing. I think the inflation argument is probably

17:35.000 --> 17:37.360
somewhere down the road and the U.S.

17:37.360 --> 17:39.000
probably has a bias to cutting.

17:40.600 --> 17:43.840
The greatest risk I think to the market is actually

17:43.840 --> 17:46.960
the whole AI theme. I think it touches a lot more than people

17:46.960 --> 17:48.280
think it does.

17:48.280 --> 17:49.480
What does it touch? You've

17:51.920 --> 17:53.400
got the Mag 7 or 9 or whatever you want to call it, that's

17:53.400 --> 17:55.960
that. But actually they're probably untouchable in a way.

17:56.000 --> 17:58.320
Well, here's the question.

17:58.360 --> 18:01.400
A lot has been made about the comparisons between

18:01.440 --> 18:04.320
AI and the '99 dot-com bubble.

18:05.440 --> 18:08.320
It's very different from the perspective that the companies

18:08.320 --> 18:11.680
that were spending, the capex spending was basically done

18:11.720 --> 18:14.760
basically at three

18:14.760 --> 18:16.280
to four times debt.

18:16.280 --> 18:19.320
The capex now is being, by the hyperscalers, being

18:19.320 --> 18:21.040
funded by cash flow, which is good.

18:23.640 --> 18:26.760
You can say, well, it can endure so why would the spending

18:26.760 --> 18:29.600
stop? Well, the spending would stop if the earnings become in

18:29.600 --> 18:32.000
question. When you talk about these companies you actually

18:32.040 --> 18:34.600
have to say like what's the biggest risk to the market?

18:34.640 --> 18:37.160
It's the companies who are doing all the spending, they get

18:37.160 --> 18:40.800
into an earnings, a negative earnings spot,

18:40.800 --> 18:43.360
revision spot where they gotta curtail their spending.

18:43.360 --> 18:46.520
That's why the heartbeat of the world stops at 4 o'clock

18:46.520 --> 18:48.360
when Nvidia's earnings are about to come out.

18:48.360 --> 18:49.880
Right, exactly.

18:49.880 --> 18:52.320
There's other things that go along with it.

18:52.320 --> 18:55.560
There's all the companies in addition to the direct drive

18:55.560 --> 18:58.000
kind of picks and shovels that benefit from capex.

18:58.000 --> 18:59.000
If

19:02.840 --> 19:05.840
that were to ever occur the order of magnitude on the

19:05.840 --> 19:09.400
multiples would be significant

19:09.400 --> 19:12.800
because it's a crisis of confidence at that that this

19:12.800 --> 19:15.840
whole capex that we've been building up,

19:15.840 --> 19:19.760
this cycle that we're building up in our minds about

19:19.760 --> 19:22.960
this is the panacea of the future somehow

19:22.960 --> 19:24.920
gets called into question.

19:24.920 --> 19:27.440
Take that to Canada and we'll talk about investing within

19:27.440 --> 19:30.760
Canada. It seems to a large extent the second derivative

19:30.760 --> 19:33.880
of the AI build out is

19:33.880 --> 19:35.320
what Canada is dealing with.

19:35.360 --> 19:37.600
It's everything to do with the picks and shovels in a lot of

19:37.600 --> 19:38.600
ways.

19:38.920 --> 19:41.080
We have some perhaps AI companies but

19:42.240 --> 19:45.480
it's more about the energy side of things and minerals and

19:45.520 --> 19:48.960
so on and perhaps space for data centres and so on.

19:48.960 --> 19:52.360
How does this benefit affect the Canadian economy?

19:52.400 --> 19:54.640
We can go more holistically into the Canadian economy but

19:54.680 --> 19:57.440
just to kind of go in there about that discussion.

19:57.480 --> 20:00.440
I think the Canadian economy is really ...

20:00.440 --> 20:03.400
as opposed to thinking about it an innovative sense, the

20:06.040 --> 20:08.120
minerals in the ground that we have are of strategic

20:08.160 --> 20:11.360
importance and they will obviously help fuel

20:11.400 --> 20:14.480
the buildout of data centres and

20:14.520 --> 20:16.880
energy requirements and so on and so forth ....

20:16.880 --> 20:19.280
by which, and I didn't mention the other form of stimulus

20:19.280 --> 20:21.360
which is like oil keeps going down.

20:24.080 --> 20:26.960
That's a huge one. That's another big one to say that as long

20:26.960 --> 20:28.720
as that stays low--

20:28.720 --> 20:29.960
You can power a lot of stuff.

20:29.960 --> 20:31.960
--you can power a lot of stuff and you can fuel an economy,

20:31.960 --> 20:32.960
no pun intended.

20:35.040 --> 20:37.760
I think with respect to Canada what it really comes down to

20:37.760 --> 20:38.760
is government policy.

20:41.240 --> 20:42.560
I've said this ...

20:42.560 --> 20:45.280
I feel like a broken record in the sense that for 50 years we

20:46.440 --> 20:48.080
haven't done enough as a country.

20:50.120 --> 20:53.600
The trade war that started last year is

20:53.600 --> 20:56.800
a golden opportunity to us to further alliances

20:56.800 --> 20:59.080
with non-U.S.

20:59.080 --> 21:00.080
countries.

21:00.600 --> 21:03.760
Is that happening? It looks like there are some

21:03.760 --> 21:05.040
handshakes going on.

21:05.040 --> 21:08.160
I'm consuming the same media that I think everybody on this

21:08.160 --> 21:10.760
call is consuming so I don't think my opinion is any more

21:10.760 --> 21:12.080
informed than theirs.

21:12.080 --> 21:13.400
But it better happen.

21:13.400 --> 21:14.800
It should have happened yesterday.

21:16.600 --> 21:19.280
I think that's what will make us competitive in the future.

21:19.280 --> 21:21.040
If we fail to do those things

21:22.360 --> 21:26.800
then we can expect further problems because we will be a

21:26.800 --> 21:28.920
country that is operating below our potential.

21:28.920 --> 21:29.920
You've

21:32.320 --> 21:35.480
heard the banks speak publicly that they're

21:35.480 --> 21:38.800
bullish on Canada because it feels like

21:38.800 --> 21:41.880
last year was that Minsky moment, so to speak,

21:41.920 --> 21:45.360
to get us moving in the right direction.

21:45.360 --> 21:48.000
You have to take that as a positive.

21:48.040 --> 21:50.040
How quickly things will evolve ...

21:50.040 --> 21:51.600
you've got to remember, this is going to be a multi-year,

21:51.600 --> 21:53.200
multi-decade type of movement.

21:55.360 --> 21:57.200
Can it be that for the TSX?

21:57.200 --> 21:59.280
It was a pretty fabulous year last year.

21:59.320 --> 22:01.400
Can we turn that into a 5-year, 10-year?

22:06.480 --> 22:09.680
It's very interesting, I look at it this way.

22:09.680 --> 22:11.920
Artificial intelligence is a page 1 story.

22:13.720 --> 22:17.480
The hard asset theme of which Canada is known for

22:17.520 --> 22:19.600
is still a page 16 story.

22:21.000 --> 22:24.040
Normally, in the world you make more money

22:24.080 --> 22:27.240
from investing on page 16 than you

22:27.240 --> 22:28.240
do at page 1.

22:29.600 --> 22:32.880
What you want is a story going from page 16 to page 1,

22:32.920 --> 22:33.920
so to speak.

22:36.720 --> 22:37.720
Some of us don't even know what that means.

22:39.880 --> 22:43.680
The point is the whole commodity complex,

22:43.720 --> 22:45.880
well, let's take energy out of the equation because it's a

22:45.920 --> 22:49.240
little more complicated, there's less places to invest

22:49.240 --> 22:51.520
than there used to be.

22:51.520 --> 22:54.440
We lost a lot of companies in Canada in the mining sector.

22:54.440 --> 22:55.440
If you

22:57.680 --> 23:01.200
think about the [knots?] where we had that whole boom,

23:01.240 --> 23:03.720
go Canada boom there was a lot of M&A.

23:03.760 --> 23:07.200
A lot of companies got acquired, industries, there's

23:07.200 --> 23:09.280
not a lot of places to invest anymore.

23:09.320 --> 23:12.040
The resources in the ground, as you've heard from basically

23:12.080 --> 23:15.000
every politician globally, are more valuable than they used

23:15.000 --> 23:18.080
to be. You're seeing actions taken over the last

23:18.080 --> 23:21.480
12 months where nations are trying to commandeer

23:21.520 --> 23:22.680
resources in the ground.

23:24.280 --> 23:27.800
This isn't just a 12-month, 24-month exercise.

23:27.800 --> 23:31.120
This is going to be a multi-year kind of

23:31.120 --> 23:32.120
exercise.

23:33.040 --> 23:36.160
What does that mean? Things in the ground in Canada become

23:36.160 --> 23:37.400
more valuable.

23:37.440 --> 23:39.040
Are we page 16?

23:39.080 --> 23:42.200
I think we're page 16. I think page 16 may be moving closer

23:42.240 --> 23:43.880
to page, I don't know, 12 or something like that.

23:43.880 --> 23:45.280
We still got a ways to go.

23:47.240 --> 23:48.800
That, to me, is more interesting.

23:48.800 --> 23:51.120
For those on the call who have heard people like Hugo

23:51.160 --> 23:54.320
Lavallée recently he's been talking about the hard

23:54.360 --> 23:56.920
asset theme and he and I have been talking a lot about it and

23:56.960 --> 24:00.040
what this means going forward.

24:00.080 --> 24:03.200
So, yes, digital, AI, all very

24:03.240 --> 24:06.360
exciting. Not going away anytime soon

24:06.360 --> 24:09.400
but from an investment perspective there's certain things

24:09.440 --> 24:10.840
that are going to get dragged along with it.

24:11.880 --> 24:14.920
You mentioned there are less places to invest in Canada,

24:14.920 --> 24:17.200
just fewer companies which is true.

24:17.200 --> 24:20.400
There was a period of time where even investment and

24:20.400 --> 24:24.120
financiers would have a company named XXX

24:24.120 --> 24:27.080
Commodities and they flipped to something else because that

24:27.080 --> 24:28.720
sort of fell out.

24:28.720 --> 24:30.600
We'll see more of that happening too, right?

24:30.600 --> 24:34.040
I mean in theory, there will be more companies

24:34.040 --> 24:37.080
created to address essentially what's

24:37.080 --> 24:38.520
in the ground, is that what we're saying?

24:38.520 --> 24:41.560
Maybe, maybe, or there will just be more M&A

24:41.560 --> 24:44.640
and it will further kind of go into the hands

24:44.640 --> 24:46.880
of fewer larger people.

24:46.880 --> 24:47.880
Governments?

24:48.400 --> 24:49.640
It started, right?

24:50.680 --> 24:51.800
It started in the U.S. Given

24:53.840 --> 24:56.120
the rhetoric that we're all hearing in the media

24:57.920 --> 25:02.040
there is a desire for governments to commandeer

25:02.040 --> 25:03.240
resources in the ground.

25:03.240 --> 25:05.720
How are you leaning into Canada in terms of positioning, in

25:05.720 --> 25:08.880
terms of broad strokes

25:08.880 --> 25:12.200
of how you're aligning yourself with Canada

25:12.200 --> 25:14.120
versus the rest of the world? There's a question coming in

25:14.120 --> 25:15.560
about your thoughts on Japan.

25:17.560 --> 25:20.760
Well, Canada, I think, just from kind of

25:20.760 --> 25:22.640
comparing Canada to the rest of the world,

25:23.880 --> 25:26.760
the resource aspect is exciting.

25:26.760 --> 25:28.200
It's not going to be a straight line.

25:28.200 --> 25:30.040
It's going to be very volatile.

25:30.040 --> 25:33.120
There is a lot of fast money in this stuff as well.

25:33.120 --> 25:34.440
You've seen it in things like silver.

25:34.440 --> 25:37.640
If anybody has watched the chart of silver

25:37.640 --> 25:38.480
over the last little while...

25:38.480 --> 25:41.120
It's better than gold.

25:41.120 --> 25:42.680
Much better than gold. Can you really explain it on a

25:42.680 --> 25:44.800
supply-demand basis because at the end of the day silver is

25:44.800 --> 25:46.240
really an industrial commodity.

25:46.240 --> 25:49.360
You probably can't so things are going to be

25:49.360 --> 25:50.360
fraught with volatility.

25:51.800 --> 25:55.360
I think the person

25:55.360 --> 25:57.840
who's asking the question about Japan, I don't have a strong

25:57.840 --> 26:01.600
opinion on Japan. Japan has been notoriously

26:01.600 --> 26:04.480
cheaper than the rest of the world but reflating at this

26:04.480 --> 26:05.480
point in time.

26:08.640 --> 26:11.920
If I had to kind of survey some of our global

26:11.960 --> 26:15.240
PMs around the complex I think there's generally a positive

26:15.280 --> 26:16.680
bent towards Japan.

26:16.720 --> 26:19.760
I can't specify any one industry or

26:19.800 --> 26:22.120
sector but generally going in the right direction.

26:23.720 --> 26:26.560
A question on trade because it is going to be, I mean, it

26:26.600 --> 26:28.920
looks like one of the biggest questions for Canada going

26:28.920 --> 26:31.320
forward because we have to renegotiate NAFTA or whatever you

26:31.320 --> 26:32.320
call it.

26:33.840 --> 26:37.080
It looks like the global trade discussion is

26:37.080 --> 26:40.040
shifting. I mean, Venezuela is a piece of this story and

26:40.080 --> 26:42.960
maybe Greenland as well but there are global shifts.

26:42.960 --> 26:46.040
Again, how do you sort of lean into that, how do

26:46.040 --> 26:48.760
you invest around it? Do you need to invest around?

26:48.800 --> 26:50.280
Maybe you don't.

26:50.280 --> 26:54.880
No, I think it's very difficult to

26:54.880 --> 26:58.080
predict with any degree of confidence where you

26:58.120 --> 27:01.240
think a bunch of government officials who meet around a

27:01.280 --> 27:04.480
board table and eventually come out with some kind of

27:04.480 --> 27:07.680
policy or deal in place. I think you do

27:07.680 --> 27:12.040
your best to kind of understand

27:12.040 --> 27:15.200
what could be the potential risks, what could be potential

27:15.200 --> 27:18.200
upside and if the price seems right to you, if you're kind

27:18.200 --> 27:21.200
comfortable with that risk-reward backdrop you invest

27:21.200 --> 27:24.240
accordingly. I don't think

27:24.240 --> 27:27.520
it can be more finer than

27:27.560 --> 27:31.000
that. I think there's too many unknowns

27:31.000 --> 27:34.080
and too much uncertainty to go, you know, start

27:34.120 --> 27:37.480
pounding a table on any one thing but you monitor

27:37.480 --> 27:40.680
it, price is probably your best predictor of the

27:40.680 --> 27:42.080
course of action you should take.

27:43.360 --> 27:46.400
That's what I think. That's what cycles are all

27:46.400 --> 27:49.040
about because typically when you buy cyclical stocks,

27:50.560 --> 27:53.120
you think about when you buy them, you buy them, actually,

27:53.160 --> 27:54.560
you start buying them during a recession.

27:54.600 --> 27:57.400
What does that mean? You open up the paper in the morning and

27:57.400 --> 28:00.560
the headlines seem awful so it should feel

28:00.560 --> 28:01.840
awful when you by them.

28:03.000 --> 28:04.600
That's actually the right thing to do.

28:04.640 --> 28:07.560
The last thing you wanna do is buy them when it sounds too

28:07.600 --> 28:09.560
good to be true because it probably is.

28:09.560 --> 28:12.680
So then let me ask you this with a minute to go.

28:14.000 --> 28:17.240
If there are concerns, because you mentioned AI, risk,

28:17.240 --> 28:20.520
exposure and so on, if AI has a real stumble

28:22.200 --> 28:25.320
is Canada a good place to be to minimize

28:27.960 --> 28:29.400
the damage?

28:29.400 --> 28:32.960
It's a tough question. I think if you decompose

28:33.000 --> 28:36.400
Canada, you look at the [indecipherable area, we

28:36.440 --> 28:39.320
have been bearish on the price of crude.

28:39.320 --> 28:42.360
I think the recent actions in Venezuela as

28:42.360 --> 28:45.520
well as the general

28:45.520 --> 28:48.400
backdrop in the supply market for oil

28:49.600 --> 28:52.360
has leaned towards lower prices.

28:53.560 --> 28:56.720
We said that last year and all that's still

28:56.760 --> 28:57.760
in play.

28:59.200 --> 29:01.840
Last year I remember saying, in February of last year saying

29:01.840 --> 29:04.280
the one thing that you know about Trump in which he's always

29:04.280 --> 29:06.920
been consistent on in that administration, they want lower

29:06.920 --> 29:08.320
lower oil prices.

29:08.320 --> 29:09.440
And they are getting them.

29:09.440 --> 29:11.520
And they're getting them and they're gonna find every way to

29:11.520 --> 29:13.800
get them. That's not great for Canada.

29:13.800 --> 29:14.800
The trade

29:19.600 --> 29:22.840
between the U.S., Mexico and Canada, that will probably

29:22.840 --> 29:27.000
be put on the back burner a little bit with recent global

29:27.000 --> 29:30.480
issues going on so

29:30.480 --> 29:34.440
a resolution on that front may be postponed a little.

29:34.440 --> 29:35.960
It's hard to say there.

29:37.600 --> 29:40.920
That affects the banking sector but I think people

29:40.920 --> 29:42.560
are generally bulled up on banks.

29:42.560 --> 29:45.480
They've been very good stocks because of what I said earlier.

29:45.480 --> 29:48.840
The long term is maybe Canada starts investing

29:48.840 --> 29:52.360
in its own country and

29:52.360 --> 29:56.080
building things and so on and so forth and strikes

29:56.080 --> 29:59.400
international trade alliances with other countries

29:59.440 --> 30:01.520
where it hasn't had before.

30:01.560 --> 30:04.120
Does it feel awful now and you should be fine?

30:04.120 --> 30:06.600
It doesn't feel awful because we've had a really good stock

30:06.600 --> 30:09.640
market for a long time. As I said we've got stimulus

30:09.640 --> 30:11.120
coming.

30:11.160 --> 30:14.440
I'm more worried about when things

30:14.480 --> 30:17.600
are good the returns are good

30:17.600 --> 30:20.320
and everything, that's when you don't sleep as well.

30:20.320 --> 30:22.480
When things are bad and in your face you're like, well, at

30:22.520 --> 30:23.600
least I know what I'm dealing with.

30:25.480 --> 30:28.400
When things are good you're always kind of looking for what's

30:28.400 --> 30:31.800
going to jump out of the closet or

30:31.800 --> 30:34.680
what's sleeping under the bed, what monsters underneath the

30:34.680 --> 30:36.280
bed that you forgot about.

30:36.280 --> 30:37.920
Those are the things that ...

30:37.920 --> 30:41.120
so you're more hyper aware actually when things are good

30:41.120 --> 30:42.760
than when things are bad.

30:42.760 --> 30:43.840
When it's bad it's in your face.

30:45.160 --> 30:47.240
You know what you know at that point.

30:47.240 --> 30:49.600
Andrew Marchese, fantastic to get your views on the

30:49.600 --> 30:51.200
marketplace, Canada and the globe.

30:51.200 --> 30:52.120
Thank you for joining us.

30:52.120 --> 30:52.440
Thank you.

30:52.440 --> 30:53.240
Happy New Year.

30:54.400 --> 30:58.320
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30:58.320 --> 31:02.480
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31:31.280 --> 31:35.080
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31:35.120 --> 31:39.040
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32:05.200 --> 32:06.880
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FidelityConnects: Jurrien Timmer – The global macro view January 26, 2026

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