Bull markets legendarily climb a Wall of Worry, rising as widespread fears prove false. That wall remains bullishly intact – despite dour responses to my bullish 2026 forecast – rendering the TSX’s March dip temporary.
Those responses share one common theme: “Yeah, but.” As in, “yeah, but what about Iran?” “Yeah, but how about U.S. President Donald Trump’s crazy tariff threats?” “Yeah, but isn’t this bull market too old?”
Let’s help them butt out.
Yeah, you were bullish. But surely the Iran war changes your view.
No. War is tragic yet magic for markets. Energy-centric and regional wars lack scale and wallop power. Markets initially weigh potential worst-case scenarios … then soon move on to new highs. The roaring 1980s and 1990s featured strikes on Libya, the Falklands, Bosnia, the first Iraq War … and more. The 2000s? Afghanistan, Iraq, the Arab Spring and beyond. Even Ukraine didn’t solely drive 2022’s weakness. Stocks’ rise since, while that war (sadly) rages, proves it.
Canada, Japan, European allies willing to use ‘appropriate efforts’ to reopen Strait of Hormuz
The Gulf Coast countries total just 3.5 per cent of global GDP. Small. Fears mostly centre on energy market disruptions and potential knock-on effects for stocks and GDP – hence, the TSX’s fear-driven, 5.7-per-cent slide amid Canadian energy cost concerns, despite your market’s huge energy weight. That likely reverses, soon. Why? Stocks reliably pre-price the end of conflicts.
Iran isn’t a huge oil producer. Oil shipping is the main issue. Famously, 20 per cent of global oil needs flow through the Iran-blocked Strait of Hormuz. Yes, the effective closing is disruptive. But roughly a third of that traffic is going in for processing – not out. It now heads elsewhere. Pipeline workarounds exist for almost a third of Hormuz-impacted oil, including in the UAE and Saudi Arabia. Fear is excessive.
Drawn-out conflict is unlikely. War dragging into summer would be toxic politically for Mr. Trump and his Republicans come November’s U.S. midterm elections. Regardless, stocks will begin pre-pricing the Strait’s reopening soon. Oil likely falls below pre-war levels. In the nine prior oil-related conflicts since 1980, prices rose in the first month. But six and 12 months from conflict’s start? Prices were down 4 per cent and 5 per cent, respectively.
Near-term volatility may persist. But ample global fuel supply – boosted by Canada’s big output – undercuts fears. No buts about it.
Yeah, American legislative “midterms” usually drive gridlock, but Mr. Trump makes this time different!
Oil and LNG prices surge after Iran attacks Persian Gulf energy hubs
People said 2022’s midterms were different. They always do. They weren’t! Regardless of party, the U.S. presidents’ party lost House seats in 22 of 25 midterms since 1926, shedding a median 26 seats. They lost Senate seats in 72 per cent of those midterms. Republicans hold a tiny House edge – and 53 of 100 Senate seats. Even small midterm flips hand the Democrats one or both chambers.
Mr. Trump’s approval ratings plumb historical lows now. He must radically up his ratings to achieve a gridlock-busting result. If fighting in Iran drags on, that won’t help him.
Yeah, but how does that help Canada?
My forecast column noted that global markets move together far more often than not. America’s S&P 500 and the TSX have a 0.81 correlation spanning the past 20 years – sky high, given -1.00 means polar opposite and 1.00 signals lockstep movement. The S&P 500 and MSCI World, ex USA, correlation’s? 0.83!
Yeah, but why won’t global returns be as big as 2025?
The “Midterm Miracle” – stocks’ high frequency of gains tied to emerging political gridlock – comes late in midterm years. Earlier, extremist campaigning stokes fearful uncertainty and slogging stocks – like now. There isn’t time for the Miracle to spark huge gains before year end.
But surely Mr. Trump will unleash more tariff terror, no?
He loves tariffs as leverage. More tariff tantrums won’t surprise – maybe as negotiating tactics ahead of USMCA talks, as seemed possible in February. But people fretted tariffs all 2025 … yet global trade grew. Stocks rose as tariffs’ bite proved less than their bark. Tariff terror lost its surprise power but helps non-U.S. stocks lead in 2025 and now.
Opinion: Why Canadian investors should not fear Trump’s tariffs
But isn’t the MSCI World’s bull market too old not to die soon?
Nonsense – bull markets never die from age. Deteriorating fundamentals, sudden shocks, excess sentiment or some combination gets them … always. At 41 months in USD, this one isn’t even old. Consider U.S. stocks for their longest accurate history. The past century’s median bull market lasted 60 months. Only one reached its third birthday without celebrating a fourth (1962 – 1966’s).
Yeah but the weak U.S. dollar will sink stocks.
Pure mythology! Currencies don’t drive stocks. The US dollar’s -7.5 per cent decline against a currency basket since 2025’s start isn’t abnormal under Republican presidents. It exceeds the -12.3 per cent slide over the same stretch of Trump’s first term!
Gloomy “yeah, buts” keep sentiment in check. It’s time to worry when spirits fly so high the “yeah buts” disappear.
Ken Fisher is the founder, executive chair and co-chief investment officer of Fisher Investments.