Ninepoint Outlook Update
Ninepoint Partners Publishes 2026 Mid-Year Outlook, Notes Shift in Investor Sentiment Due to Mideast Conflict
Ninepoint Partners published its 2026 Mid-Year Outlook on June 17, declaring that the early-year consensus is dead. The Toronto-based firm, which manages roughly $8.2 billion in assets, says the conflict in the Middle East "changed that almost overnight," according to GlobeNewswire.
The year began on solid ground. Inflation was near target, interest rates were falling, and markets were calm. Then war broke out. Now Ninepoint says investors face an "unpredictable environment" that passive strategies are not built to handle.
Middle East War Shattered the Early-2026 Consensus
The trigger was the 2026 Iran War. In early March, the US and Israel struck Iranian military infrastructure. Iran retaliated by closing the Strait of Hormuz — a chokepoint that carries roughly 25-30% of global oil and 20% of global LNG. Brent Crude surged past $120 per barrel, a jump of about 30% above pre-war levels, according to GlobeNewswire.
Co-CEO James Fox said the shift was abrupt. "The year started with a clear consensus that inflation was drifting back toward target," Fox said. "The conflict in the Middle East changed that almost overnight." Co-CEO John Wilson added: "What this first half demonstrated, again, is how quickly the market backdrop can change. That's why active management matters," per GlobeNewswire.
Rate Cuts Are Off the Table as Inflation Risks Return
Before the war, markets expected the Federal Reserve and Bank of Canada to keep cutting rates. That conversation has reversed. Ninepoint's fixed income team says "rate risk is back." The US rate outlook has shifted from cuts to potential hikes, driven by energy-led inflation, according to The Sudbury Star.
Portfolio Manager Etienne Bordeleau-Labrecque has flagged the danger of holding long-duration bonds in this environment. Ninepoint is recommending "low duration" fixed income positions. The firm sees energy-driven price pressure as sticky — meaning it won't go away quickly — which makes traditional bond holdings more risky.
Energy Stocks and Real Assets Seen as Best Hedges
Senior Portfolio Manager Eric Nuttall argues that energy stocks are still undervalued. He says equity prices do not yet reflect the cash flow potential of oil companies if prices stay elevated above $120 per barrel. Ninepoint sees a "meaningful gap" in valuations for Canadian oil producers, per GlobeNewswire.
Beyond energy, Ninepoint is pointing clients toward real assets like metals and mining. These tend to hold value when inflation runs hot. The firm also flags digital assets as an emerging hedge. It projects the tokenized asset market will surpass $500 billion in 2026, up from roughly $20 billion in 2024, according to Financial Post.
Not Everyone Agrees the Disruption Is Permanent
Some firms push back on Ninepoint's alarm. Partners Group calls the crisis a "contained disruption" and argues the oil price spike reflects a temporary geopolitical risk premium. BNP Paribas says the situation is "resilience dented but not derailed," pointing to AI investment and defense spending as cushions against the shock.
The S&P 500 has hit new all-time highs despite the war, which supports the more optimistic view. But Ninepoint maintains the old playbook no longer works. The firm launched a new SpaceX HighShares ETF (ticker: SXHI) on the Toronto Stock Exchange on June 16 — with a 0% management fee until September 30, 2026 — as part of a pivot toward "sovereignty over critical infrastructure," per GlobeNewswire.
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