CC&L Financial Group Ltd.

At the heart of our organization is the commitment and desire to provide superior performance and service to our clients. Our primary objective is to meet our clients’ expectations while ensuring our people are highly motivated and enthusiastic. This requires that we keep the business narrowly defined on what we do best, and endeavour to remain at the cutting edge of research and development initiatives within financial markets.

Standing still is not an option

Each year, we take the opportunity to provide our clients with an update on our business, outlining how we are directing our efforts within Connor, Clark & Lunn Investment Management (CC&L) to fulfill our commitment to delivering investment performance and superior client service.

Our business has always been defined by continual reinvestment and innovation – standing still is not an option. As we navigate a volatile financial and policy environment, we have focused our efforts on three core areas that are foundational to the long-term strength and sustainability of our firm: our people, our technological capabilities and our physical infrastructure.

Our most important investment is in our people. In 2025, we welcomed 28 new colleagues to the firm, and we plan to add approximately the same number in 2026. These additions span investment and client functions, reinforcing both our current capabilities and our future leadership pipeline. This growth reflects our commitment to building a sustainable business across generations. By investing in talent development, succession planning and the cultivation of emerging leaders, we are ensuring that our clients will continue to benefit from a strong, stable and forward-looking organization.

Technology is the second pillar of our reinvestment strategy. We are upgrading systems across our back- and mid-office functions to enhance operational resilience, improve data integration and expand reporting capabilities. These enhancements strengthen the infrastructure that supports our investment processes and client service delivery. In parallel, we are developing a disciplined approach to artificial intelligence (AI). Our strategy is focused on enabling each area of our business to leverage AI tools and technology to improve investment and business processes. The introduction of AI tools requires adequate and deliberate oversight. Regardless of the complexity and sophistication of the AI integration, our people remain responsible for ensuring the quality and suitability of output and retain ultimate accountability for each function.

Finally, we are making meaningful investments in our office spaces in Vancouver and Toronto. These enhancements are intended to create environments that foster collaboration, creativity and connection. Our redesigned spaces support team-based work, cross-functional dialogue and stronger engagement across investment, client and operational teams. The goal is to create the conditions where ideas can be challenged, refined and implemented efficiently – ultimately benefiting our clients. We look forward to welcoming clients to our new offices in 2026 and sharing these updated spaces in person.

In closing, I extend my sincere gratitude to our clients for your trust, confidence and continued partnership.

Sincerely,

Martin Gerber
President & Chief Investment Officer

Our People

In 2025, our firm continued to grow, welcoming 28 new hires and bringing our personnel count to 150. Our business also benefits from the broader Connor, Clark & Lunn Financial Group, which employs over 500 professionals supporting business management, operations, marketing and distribution.

Our firm’s stability and specialization remain key drivers of our business. Succession planning and career development are central to our approach, ensuring continuity and long-term success.

We are pleased to share that several employees were promoted to Principal, effective January 1, 2026, in recognition of their important and growing contributions to our firm.

CC&L’s Board of Directors is also pleased to announce the promotion of new business owners, effective January 1, 2026, in recognition of their leadership and impact in their roles.

Fixed Income

Over the past decade, the Fixed Income team has invested meaningfully in building a quantitative framework to identify and harvest attractive premia in fixed income markets, initially within benchmark-relative strategies and subsequently in absolute return mandates. As these systematic return streams have proven both attractive and diversifying, client demand for dedicated solutions has begun to grow. In response, the team is developing these capabilities into dedicated quantitative strategies that can be implemented as total return solutions or as a source of portable alpha on top of a full suite of market return streams. We continue to invest in research, infrastructure and talent to deepen these capabilities and support growing client interest in resilient, diversifying sources of return across different market environments.

Sandy McArthur joined the Fixed Income team in May 2025 and quickly became a central driver of strategic initiatives across the platform. Sandy combines strong market experience with technical fluency, enabling the team to move faster and operate with greater discipline. His tenacity, cross-functional skillset and willingness to own complex workstreams have already had a meaningful impact on the business. We are pleased to welcome Sandy as a business owner in 2026.

Fundamental Equity

After more than a decade of US equity outperformance, the team believes the Canadian equity market is well positioned to outperform over the medium term. Attractive valuations, differentiated sector exposure and meaningful leverage to rising global commodity demand create a compelling backdrop for Canadian equities.

The Fundamental Equity team continues to support client investment objectives across mandates. In what has been a challenging environment for active managers in 2025, all strategies – including Canadian All Cap, income-oriented, and Small Cap equities – delivered top-quartile performance relative to their respective peers.

For several years, the Fundamental Equity team has been focused on developing the next generation of investment leaders. Three experienced Senior Research Associates joined the team over the past 12 months, further deepening research capabilities. This deliberate reinvestment underscores the team’s commitment to sustaining performance, enhancing analytical depth and maintaining a competitive advantage relative to peers over the long term. At the same time, the team is actively executing Gary Baker’s succession plan. Effective January 1, 2026, Michael McPhillips was appointed Co-Chief Investment Officer alongside Gary, sharing responsibility for equity strategy, portfolio leadership and overall investment direction. In 2027, Michael will transition into the CIO role, with Gary moving into an advisory role – ensuring continuity, mentorship and a seamless transition. Michael joined CC&L’s Board of Directors in 2026, succeeding Gary.

Quantitative Equity

2025 was a strong year for the Quantitative Equity team. The team met or exceeded added-value objectives across all key strategies, building on successful long-term track records, with sustained growth in clients and assets under management. To support that growth, the team continued to expand its capabilities, growing to 92 members, with 21 new hires in 2025. Investment professionals were added to all sub-teams during the year and investment in leadership resources across sub-teams will continue at a similar pace this year. The steady growth of the team reflects the need to continually expand and reinvest in our capabilities as the size and scope of the quantitative business has grown. At the same time, the focus on implementing differentiated insights remained front and centre, with a new investment model update that was successfully deployed in November.

To support clients in international markets, our pooled fund structures were expanded. This includes our Europe-based UCITS Fund platform for non-US-based investors, a Collective Investment Trust (CIT) platform in the United States for ERISA-regulated pension plans, a Cayman platform for US and other eligible global investors, and an LP Fund platform for eligible US investors. This investment will allow us to serve a broader client base.

Client Solutions

Consistent with the growth in our business, the Client Solutions team continued to grow. Tim Elliott joined the team in June. He was previously President & CEO of Connor, Clark & Lunn Funds Inc., a retail wealth affiliate he founded within the CC&L Financial Group 15 years ago. Tim started making an immediate impact on our business, bringing insights and specialist knowledge of the retail and wealth markets and increasing leadership in the team. He became a business owner in 2026.

Responsible Investing

2025 marked the passing of a decade since the creation of the CC&L ESG Committee. As such, our Board of Directors felt it was appropriate to undertake a review of the committee mandate and governance structure. The outcome of this undertaking led to confirmation that we continue to have the appropriate structure and resources to meet our responsible investing (RI) objectives and concluded that no material changes were warranted.

Business Update

Assets under management

CC&L’s AUM increased by CA$35 billion in 2025 to CA$112 billion as of December 31, 2025. We are pleased to report that our business grew through new client mandates across all investment teams. In 2025, CC&L gained over 100 new clients and 19 additional mandates from existing clients. Most new mandates were for quantitative equity strategies from global institutional investors.

We are proud to be the recipient of a 2025 Coalition Greenwich Award: Best Asset Manager for Institutional Investors in Canada.* This award reflects excellence across both investment performance and client service, as measured by the Greenwich Quality Index.

Final Thoughts

We sincerely appreciate the trust and support of our clients and business partners. We look forward to continuing to help you achieve your investment objectives in the years ahead.

*Throughout 2025, Crisil Coalition Greenwich conducted interviews with 147 of the largest corporate pension funds, public pension funds, financial institutions, endowments and foundations in Canada and other global regions. Senior fund professionals were asked to provide detailed evaluations of their investment managers, assessments of those managers soliciting their business, and insights on important market trends. Connor, Clark & Lunn Investment Management did not provide Crisil Coalition Greenwich with any compensation for this survey.

The technology that harnesses wind and solar power is highly noticeable at a glance – it is hard to miss towering wind turbines or gleaming fields of solar panels. But what is not so obvious is how the power gets from those visible generators into the electrical grid that eventually powers your home.

Nexans S.A. (NEX FP) is increasingly emerging as a differentiated way to play the next phase of the energy transition, where the focus shifts from building renewable capacity to connecting it at scale.

While the first wave of the energy transition was defined by rapid growth in wind and solar generation, the current phase is more complex: integrating that capacity into power systems. This is where Nexans sits – at the intersection of renewable buildout and the infrastructure required to make it usable.

Europe’s plan for energy security

In this context, offshore wind is becoming a central driver of demand once again. Following a period of delays linked to cost inflation and project economics, Europe is now moving to re-accelerate deployment. At the January 2026 North Sea Summit, governments committed to developing ~100GW of offshore wind capacity, with a longer-term ambition of 300GW by 2050, alongside coordinated investments in cross-border grid infrastructure.

This renewed momentum is not just about decarbonization, it is increasingly tied to energy security and affordability. European policymakers are prioritizing domestically generated electricity to reduce dependence on imports, while structurally higher and more volatile power prices continue to incentivize investment in renewable capacity.

Nexans ready to support Europe’s wind commitments

For Nexans, offshore wind is particularly attractive. Each project requires significant volumes of high-voltage subsea export cables and increasingly complex interconnection solutions, positioning cable suppliers as critical enablers of deployment. As projects scale and networks become more integrated, demand is shifting toward higher-specification, higher-margin systems areas where Nexans has strong technological capabilities.

At the same time, the company’s strategic repositioning over recent years has sharpened this exposure. By exiting more commoditized cable activities and focusing on electrification and high-voltage segments, Nexans has aligned its portfolio with the fastest-growing and most structurally supported parts of the market.

Buying local – Nexans is Europe-based

This is further reinforced by an evolving policy backdrop in Europe. The EU’s industrial strategy is increasingly incorporating local content requirements and procurement incentives aimed at strengthening domestic manufacturing in key energy technologies. For a Europe-based player like Nexans, this creates a supportive competitive environment, particularly in large-scale infrastructure linked to renewables.

Importantly, supply dynamics remain favourable. High-voltage subsea cable capacity is limited globally, with long lead times and high technical barriers to expansion. As offshore wind deployment accelerates again, this constraint is likely to support pricing and contract discipline across the industry.

Disciplined execution, rising returns

The key focus for investors is increasingly on Nexans’ ability to translate strong structural demand into consistent and higher-quality earnings. As the group continues to prioritize selective project execution and disciplined contract structures, visibility on margins and cash generation is improving. This reflects a more mature operating model, with greater emphasis on value over volume and a clear focus on returns.

In that context, Nexans offers a differentiated exposure to renewables, not through generation itself, but through the critical systems that enable renewable electricity to be delivered, scaled and monetized. As Europe enters a renewed phase of offshore wind expansion and electrification, the company may be well positioned to capture both growth and improving returns.

Monetary trends suggest that US economic prospects were improving relative to the Eurozone before the Gulf War III energy shock.

US six-month real narrow money growth rose to its highest since September 2024 last month – see chart 1. (The M1A aggregate used here – comprising currency in circulation and demand deposits – has been adjusted for a previously discussed distortion to November / December deposit data.)

Chart 1

Comparable Eurozone growth, by contrast, eased slightly, resulting in the US taking the lead for the first time since June. Japanese momentum was stable in negative territory, while UK February money numbers have yet to be released.

Global – i.e. G7 plus E7 – six-month real narrow money growth is estimated to have been little changed from January’s high, based on monetary data covering 88% of the aggregate – chart 2. So global economic momentum appears to have been on course to hold up through Q3 before the Gulf War III shock.

Chart 2

An early, sharp reversal in real money growth is in prospect, however, as the energy shock boosts six-month consumer price momentum. Higher interest rates, meanwhile, will likely slow nominal money expansion.

Real money trends, therefore, may be moving into alignment with a forecast based on cycle analysis of significant economic weakness in H2 2026-2027.

The Gulf War III mortgage rate shock may be the trigger for the long-term housing cycle to enter its “bust” phase.

The driving variable of the cycle is demand for new and existing homes. This is reflected in turnover and has secondary impacts on new construction and prices. Prices usually lag volume gauges of the cycle.

The UK cycle can be traced back in various indicators to the early 18^th century (at least) – see chart 1. Official statistics on turnover – property transactions – start in 1959. Turnover is closely correlated with the number of approved or actual loans for house purchase, data for which begin in the interwar period. To go back further, it is necessary to rely on completions data, a regional (Middlesex) series on registrations of property deeds and an indirect gauge, imports of timber, for the earliest years.

Chart 1

The dates in the chart are suggested timings of housing cycle lows. Based on these dates, there were 16 complete cycles, measured from low to low, over the 298 years between 1711 and 2009, implying an average cycle length of 18.6 years.

The two cycle downswings in the first half of the 20^th century were magnified and extended by the World Wars – it is reasonable to assume that the lows would otherwise have occurred several years earlier.

The three completed cycles since WW2 were of similar length – 18, 18 and 17 years respectively. If the current cycle were to conform to the 18.6-year long-term average, another low would be reached in 2027-2028.

Chart 2 shows higher-frequency data on property transactions and mortgage approvals. The peak of the current cycle, in 2021, occurred earlier than in the prior two, as pandemic-related policy stimulus pulled forward demand. Activity corrected sharply in 2022-23 as interest rates rose but staged a partial recovery in 2024-25. This appears to have ended, with mortgage approvals easing to a 23-month low in January.

Chart 2

The new buyer enquiries component of the RICS housing survey is correlated with the annual rate of change of mortgage approvals – chart 3. Buyer demand is likely to weaken in response to the mortgage rate shock, suggesting a further / faster decline in approvals.

Chart 3

The rate of change of approvals, in turn, leads the rate of change of annual house price inflation – chart 4. Falling approvals suggest that annual price momentum – 1.4% in January, according to the ONS index – will slow further, probably turning negative.

Chart 4

Housebuilding stocks are behaving consistently with the onset of the bust phase of the cycle, recently breaking below their 2022 trough to reach the lowest level since 2013 – chart 5.

Chart 5

The Gulf War III energy shock has been compounded by a dramatic repricing of interest rate expectations, partly reflecting hawkish central bank communications, particularly from the ECB and Bank of England.

The central banks fear a repeat of the inflation upsurge around the Russian invasion of Ukraine, their accepted wisdom being that higher energy prices destabilised inflation expectations, resulting in significant “second-round” effects.

The “monetarist” view is that the impact of a shock on price- and wage-setting depends on the prevailing monetary environment. The Russia-Ukraine shock generated large second-round effects because it occurred against a backdrop of strong money growth. Eurozone and UK broad money – as measured by non-financial M3 and M4 – rose by 9.1% and 10.5% annualised respectively in the preceding two years – see chart 1.

Chart 1

The latest two-year growth rates, by contrast, are 3.2% and 3.9%, with little sign of acceleration in shorter-term data. Money to nominal GDP ratios have returned to around end-2019 levels. Unlike in 2022, there is no monetary “excess” to accommodate a sustained inflation rise.

Policy tightening against this backdrop would likely result in much more serious economic weakness than in 2022-23, with attendant risk of a medium-term inflation undershoot.

One caveat to a relaxed view of second-round effects is that political pressure to respond to a new cost-of-living shock could trigger a fiscal / funding crisis, forcing a return to QE that results in another money growth surge. Still, the suspension of central bank independence implied by such a scenario will be more likely if officials compound their 2021-22 policy error by making the opposite mistake now.

In-depth macro analysis has always been a cornerstone of this process, based on an understanding that emerging markets are highly sensitive to macro shocks which can overwhelm ostensibly solid company fundamentals. The outbreak of conflict following US and Israeli strikes to take out the Iranian regime is one such event, and has sparked violent moves in markets. Our macroeconomic analysis and risk controls are crucial in helping to navigate a volatile environment.

The approach to macroeconomic analysis here is disciplined and incremental, and does not involve the type of Hail Mary calls (i.e., speculating on President Trump’s war aims) that get market pundits invitations onto Bloomberg and CNBC. Our approach to forming a top-down view of our markets is to mark the direction of travel, whether it be our monetary indicators or more qualitative factors such as politics and institutional quality. We marshal all of these data points into one number which rates the level of conviction for a country with 1 being the highest level of conviction corresponding with a maximum overweight (key caveat: provided we can find the right stocks that fit our process), and 5 being lowest (meaning no exposure at all). As the data changes, we will tweak that level of conviction, which should be tightly aligned with adjustments made in the portfolio.

This work is designed to help us understand how the investment environment is changing through cycles, structural change and theme-driven liquidity. Through this context, we can get a sense of what types of businesses are likely to be rewarded in a given environment and adjust the portfolio accordingly.

Test and re-test

We are big subscribers to the insights of psychologist and writer, Phillip Tetlock, who is an expert on forecasting. His studies found that the best long-term forecasters are those who are able to make probabilistic estimates, calibrate, learn and update beliefs frequently. They make many small corrections to their analysis as fresh data arrives, which leads to better long-run accuracy than rigid “set and forget” predictions. This is the forecasting approach we adopt in both our macro and company analysis, illustrated in our process diagram below.

Through periods of high uncertainty and violent market moves like what we have currently, we lean heavily into this OODA (Observe, Orient, Decide, Act) Loop. This involves a constant testing and re-testing of our macro views and investment hypotheses, and tweaking of the portfolio as conditions change.

Example: lifting oil exposure

Moving from being zero weight in oil companies at the start of 2026 to equal weight (and with more beta to oil than the index) by the end of February is one example of how iterative tweaks in our macro analysis left the portfolio in a better position to weather the events of early March.

Towards the end of last year, one of the most debated topics of discussion in the team was our heavy underweight to the energy sector and, in particular, oil. Our only energy holding at the end of 2025 was uranium miner CGN.

While we remain structurally cautious about oil’s long-term investment prospects, from a portfolio risk perspective we became concerned that having no oil exposure had turned into a crowded consensus trade – especially as weak prices began to squeeze US shale production. This alongside news of a US naval build up in the Persian Gulf, Arabian Sea and Eastern Mediterranean early in the year suggested the portfolio was exposed to risk of a geopolitical shock in the region. Through January and February, we gradually lifted our oil exposure from zero to an equal weight of over 3.5%.

While our macro and risk analysis helped to identify a potential vulnerability, we could not know that conflict was about to break out in early March and drive such a dramatic hike in the price of oil. It was not a case of just adding oil beta to the portfolio. We added Argentinian shale oil producer Vista Energy and Petrochina based on their healthy returns on invested capital sustainable even through weak pricing environments, underpinned by growing production profiles, capital discipline and low lifting costs.

Vista Energy: Production growth and falling lifting costs driving earnings growth

Source: Vista Energy Investor Relations 2026

The lift to oil exposure was timely, helping to preserve relative gains made this year despite sharp drawdowns in other winning positions that had been hit by broad risk-off sentiment.

Where to from here?

We rated the global monetary backdrop as modestly supportive coming into this shock, largely reflecting favourable trends in EM. However, we have been expecting the global stockbuilding cycle to turn down during 2026, giving us a bias to increase defensive positioning at the margin, especially on any signs of monetary weakness.

The energy price spike, unless swiftly reversed, will push up inflation and squeeze real money growth. It is leading to a revision of expectations for central bank policies, which may dampen nominal money growth. Nominal money trends are also at risk from recent tightening in US private credit conditions, which the current shock may exacerbate.

We are cautious and do not expect the negative effects of this shock will be swift to reverse, so our inclination is to add to defensive positioning on any rally, rather than to view current market weakness as a buying opportunity.

The long-standing forecast here has been that the three key global economic cycles – stockbuilding, business investment and housing – would enter downswings by 2026-27.

In the event that the downswings were synchronised, the result would be a major recession, on the scale of 1974-75 or 2008-09.

If the downswings occurred successively, the result would be a long period of rolling weakness including a less severe recession – the early 1990s scenario.

Chart 1 is an exhibit used in 2018, suggesting – based on average cycle timings – a recession bottoming in 2019-20, a slowdown into 2023 and a major recession around 2027. The former two played out.

Chart 1

The housing cycle is already in a downswing, the stockbuilding cycle is at or close to a peak, while the business investment cycle is well-advanced. The Gulf War III energy price shock could be the trigger for synchronised weakness.

There have been six oil price “shocks” since the 1960s, defined here as episodes in which the spot price rose 50% or more above its two-year moving average for at least three months. All were followed by a significant contraction in G7 industrial output and five were associated with a US recession, as determined by the NBER – chart 2.

Chart 2

Spot Brent of $100 per barrel represents a 37% premium to the two-year moving average. Oil would have to be sustained at about $115 for three months for the current spike to qualify as a “shock”.

The oil intensity of GDP has fallen dramatically since the 1970s, suggesting less vulnerability to shocks. This could explain why the most recent shock – in 2022 – did not involve a US recession.

An alternative view is that a recession was avoided because the cyclical backdrop was less unfavourable and there was pent-up demand due to pandemic disruption, reflected in a large monetary overhang. The stockbuilding cycle turned down in 2022 but the housing and business investment cycles were in late upswing and recovery phases respectively.

The prior shocks caused short-term inflation spikes and were associated with upward pressure on interest rates, contributing to a fall in nominal narrow money momentum. G7 real money contracted ahead of maximum economic weakness. Real money data will be key for assessing the extent of current economic damage.

“A good laugh and long sleep are the best cures in a doctor’s book.” – Old Irish proverb

It’s been more than a decade since the CDC declared sleep disorders “a public health epidemic.” Since then, the world has woken up and taken note. The long-term impact of sleep loss on mental health and physical performance has been widely documented in scientific studies. From cardiovascular disease to compromised immunity and burnout, poor sleeping habits quietly add up over time while increasing our mortality risk. Sleep is also important for cognitive health because it gives the brain time to remove toxins that accumulate while we are awake.

The three foundational pillars of human health are sleep, diet and exercise. Diet and exercise have always dominated conversations around health with very little attention paid to sleep and sleeping habits. Now sleep (or the lack of it) has finally caught the attention of society at large and with it we have seen the rise of the sleep economy.

The broader sleep economy encompasses everything from sleeping aids to sleep medication and supplements, bedding and furnishing to sleep tourism. Just the sleeping-aid market is estimated to reach $188 billion according to Statista. The emergence of the sleep economy is best represented by the popularity of products like the Oura ring that tracks heart rates, sleep cycles and recovery metrics. Oura ring has sold over 5.5 million rings and the company behind it, Oura Health, was valued at $11 billion last year.

Beyond just physical products, we are also seeing the rise of sleep tourism, with travelers showing an increased preference for sleep-focused holidays. Hotels understand that their customers now value good quality sleep and offer everything from smart beds and pillow menus to sleep-specific spa treatments and dedicated sleep programs to help reset the circadian rhythm and allow customers to rest.

One of the holdings in our portfolio is Atour Lifestyle Holdings Ltd. (ATAT US), the largest hotel operator in China’s upper-midscale segment. There are several attributes of the business that make it attractive purely as a hotel operator – from its brand strength to its ability to expand in an asset-light manner while maintaining its attractiveness to prospective franchisees.

However, Atour also has a fast-growing retail business that caters directly to emerging sleep economy trends. From deep sleep pillows to mattresses and comforters, Atour is the first hotel chain in China to develop a retail business around the sleep economy. Sleep economy aside, Atour also taps into so called new consumption trends in China where consumers prioritize maintaining a balanced lifestyle and personal fulfillment over conspicuous consumption that was prioritized by their parent’s generation. From that perspective, Atour for us checks two boxes: the rise of the sleep economy and shift in spending toward services like travel and tourism, concerts etc.

Atour is able to create synergies with its hotel business by cross selling its products to its hotel guests. Hotel guests get what is in effect a free trial when they stay at an Atour property and their real-time feedback is used to enhance product R&D. It helps that Atour’s premium positioning has a positive spillover effect on the brand positioning of its sleep products. Being alert to changing societal norms and evolving spending priorities is a key element in identifying themes within our investment process. We sleep well at night knowing that these thematic tailwinds provide a nice boost to Atour’s revenues and profitability on top of good execution with its core hotel business.

A rise in the ISM manufacturing new orders index was expected to be short-lived even before the outbreak of Gulf War III.

The index jumped from 47.4 in December to 57.1 in January, with a small retreat to 55.8 in February. The January reading was the strongest since 2022.

The ISM rise, along with a parallel increase in global manufacturing PMI new orders, boosted hopes of a sustained industrial upswing with an associated earnings-driven broadening of equity market gains.

The interpretation here, by contrast, has been that the ISM / PMI rises reflect the global stockbuilding cycle moving into a peak. The cycle was expected to begin a downswing by mid-2026 into a H1 2027 low.

The ISM customer inventories index supports this interpretation. The jump in new orders has been accompanied by a sharp fall in customer inventories to below 40. Previous declines to sub-40 occurred around peaks in new orders – see chart 1.

Chart 1

This seems, on first consideration, perverse. The customer inventories index is a gauge of whether stock levels are too high or low. Falling / low readings might be expected to signal future restocking, resulting in a rise in new orders.

The explanation for the opposite relationship is that, by the time they report lower inventories, customers are already placing restocking orders, i.e. the additional demand is reflected in current not future new orders. The next phase of the cycle involves customers reducing demand as inventories return to a comfortable level. This phase marks the new orders peak.

An imminent ISM new orders reversal is also implied by a recent decline in six-month growth of real currency in circulation, which has led the orders index by an average eight months historically and peaked most recently in August – chart 2.

Chart 2

The suggested explanation for this relationship is that currency demand is influenced by retail spending plans, with such spending driving orders placed by retailers / wholesalers. The currency slowdown may indicate that spending prospects were deteriorating before the energy price shock.

Lindsay Holtz and Moira Turnbull-Fox were featured in Benefits and Pensions Monitor article titled “Why micro-communities matter for women’s careers.” They spoke about our Women’s Collective and the importance of creating spaces for women across CC&L Financial Group and its affiliates to connect and support one another.

“There’s lots of external networking events that people can identify, but we identified a gap that was right here at home. It was easy for us to grab that and drive it in the direction that we wanted it to go in,” Lindsay said.

The article coincided with International Women’s Day – a global reminder of the progress made, the work still ahead and the importance of creating environments where women can lead, thrive and be heard. It’s a moment to celebrate achievements, advance equity and reaffirm our commitment to supporting women across our workplaces and communities.

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