Good morning and happy summer!
As we step into another vibrant summer week, 2025 continues to deliver engaging developments and headline-driven discussions. Despite the usual calm that summer brings, 2025 continues to deliver headline-driven volatility. From tariffs to tax cuts, political maneuverings to shifting market sentiments, the external environment seems perpetually turbulent, policy shifts keep the conversation lively, offering numerous opportunities for thoughtful reflection and strategic action.
In times like these, the wisdom of Stoicism—particularly the teachings of Seneca—can provide clarity and calm. Seneca, a Roman statesman and philosopher who navigated his own complex political landscape nearly two millennia ago, reminds us that:
“We suffer more often in imagination than in reality.”
Seneca’s life was shaped by political turmoil, economic uncertainty, and social upheaval, not unlike our current moment. His writings urged individuals to distinguish clearly between what can be controlled—our thoughts, attitudes, and responses—and what lies outside our power—the actions of political leaders, the ebb and flow of markets, and the imposition of tariffs or legislation.
The recent “One Big Beautiful Bill” passed by the U.S. Congress includes extending Trump’s 2017 tax cuts, temporarily eliminating taxes on overtime and tips, cutting Medicaid and food stamps, increasing defense and border spending, and rolling back many clean-energy initiatives. Politicians and analysts express concern, as the Congressional Budget Office projects this bill to add approximately US$3.4 trillion to the federal deficit over the next decade.
Escalating tariff threats—including a potential 35% blanket rate against Canada and significant tariffs such as a proposed 50% rate on copper imports—have spurred understandable concern. The market response, however, has been notably muted compared to the sharp volatility observed during similar announcements in April. Equity markets remain resilient, possibly due to skepticism regarding the administration’s willingness to fully enact these tariffs or due to confidence in underlying economic fundamentals. Stock indices are currently hovering near record highs, though analysts caution that sustained uncertainty or concrete negative impacts on inflation, growth, or corporate earnings could quickly shift sentiment.
On the economic front, recent employment reports continue to showcase robust U.S. job growth, with unemployment rates remaining historically low. Consumer spending and confidence indicators have also held strong, suggesting continued economic momentum. Corporate earnings across multiple sectors, including technology and consumer goods, have exceeded expectations, lending further support to investor confidence. Central banks, notably the Federal Reserve, have signaled cautious optimism, indicating measured responses to inflationary pressures, which remain elevated but manageable.
Meanwhile, global trade patterns are showing adaptive responses, with businesses strategically redirecting trade flows to navigate tariff uncertainties. In Canada, while specific sectors such as metals, automotive, and copper exports face immediate concerns, broader economic resilience remains intact, supported by exemptions for USMCA-compliant goods and adaptive market strategies.
For investors, and indeed all of us, Seneca’s philosophy offers practical insights:
- Differentiate Clearly: Recognize the difference between what’s within your control (investment strategy, personal spending, emotional reactions) and what isn’t (tariff announcements, legislative changes, market swings).
- Act Deliberately, Not Reactively: Respond thoughtfully, guided by principles and long-term strategy rather than short-term panic induced by headlines.
- Embrace Uncertainty: Markets will always fluctuate, and policy uncertainty will persist. Seneca would advise preparing yourself internally to withstand external chaos by maintaining personal clarity and resolve.
Canada, specifically impacted by proposed tariffs on non-USMCA compliant goods, serves as an example of the importance of understanding the real versus imagined implications. While significant impacts might be felt in metals, vehicles, and copper exports, the tangible aggregate effect remains manageable due to reorientation of trade flows and sector-specific exemptions.
As we navigate these turbulent waters, consider Seneca’s enduring wisdom:
“A gem cannot be polished without friction, nor a person perfected without trials.”
Markets or otherwise, let this week’s trials polish, allow challenges to clarify rather than confuse. And, above all, remember that while external conditions will ebb and flow, internal resilience remains entirely within your power. Embrace this week’s challenges as opportunities for growth, innovation, and clarity. Remember, external shifts offer a canvas upon which proactive, strategic actions can paint meaningful success.
Wishing you clarity and composure this week as you enjoy these summer weeks.
Be well and enjoy the moments,
Derek Henderson