Fiera Capital Global Asset Allocation Monthly Update: August 2026

Geopolitical tensions, trade uncertainty and renewed inflation risks favour a cautious, higher-for-longer investment environment despite resilient US growth.

• In July, the MSCI All Country World Index was unchanged, while the S&P 500 fell 0.1%, the Nasdaq dropped 6.6%, the S&P/TSX gained 1.1% and MSCI emerging markets declined 3.3%.
• Fixed income weakened as yields rose: the Bloomberg US Aggregate Bond Index fell 1.3% and the FTSE Canada Bond Universe fell 1.6%; US 10-year yields increased 27 basis points to 4.73% and Canadian 10-year yields rose 28.4 basis points to 3.66%.
• Oil surged 21.83% to $84.67 per barrel amid escalating US-Iran hostilities, while gold gained 0.26% to $4,049.10 per ounce and the US dollar weakened against all Group-of-10 currencies.
• Fiera sees a two-speed Chinese economy, with domestic demand weakened by the housing crisis and fragile employment while industrial production benefits from exports and AI-related electronics demand; July manufacturing and services PMIs returned to contraction.
• Its scenario distribution assigns 45% to sustained inflation, 30% to stagflation, 15% to recession and 10% to a productivity boom, with the recession case implying US GDP growth of -1.0%, oil at $90 and a US 10-year yield of 3.0%.

Takeaway: Investors should favour patience and account for persistent inflation, geopolitical shocks and tariff uncertainty, while recognising that an AI-led productivity boom remains a lower-probability upside scenario; the forecasts are Fiera estimates and are not reliable predictions of future returns.