Introduction
Hello everyone,
April brought no shortage of major headlines.
On the 21st, Pope Francis sadly passed away at the age of 88 after almost 12 years leading the Catholics. His funeral on April 26 in St. Peter’s Square drew over 400,000 mourners and more than 130 world leaders, a testament to a life that touched millions across the globe. Personally, I admired his humility and the example he set, showing that to be great and powerful, people don’t need to be exuberant. Besides, as a fellow Argentinean citizen and Latin American native I was honored when he was elected.
In Canada, we headed to the polls for the Federal Election and Mark Carney was elected Prime Minister, and it looks like he will form a minority government.
Across the Pacific, South Korea’s Constitutional Court upheld the impeachment of President Yoon Suk Yeol, officially removing him from office in a historic and politically charged moment for the country.
On a much more tragic note in Santo Domingo, Dominican Republic, a nightclub roof collapsed during a concert by Rubby Pérez, resulting in over 231 deaths and hundreds injured. Our thoughts are with the families of those who perished in this devastating event.
In brighter and slightly more cosmic news, on April 1, SpaceX launched Fram2, sending the first crewed spacecraft into a polar retrograde orbit. Apparently, flying around the Earth wasn’t challenging enough, so now we are going the other way. At any rate, it is exciting to see new advancements in the Space technology.
And speaking of space, on April 17, scientists detected large amounts of dimethyl sulfide and dimethyl disulfide in the atmosphere of exoplanet K2-18b, molecules that, on Earth, are only produced by life. In other words, the universe might be a little less lonely than we thought.
Finally, a widespread power outage left much of Europe literally in the dark, a reminder that even in 2025, we are still vulnerable for a blackout.
Check out my summarized Economic and Market update below and Nicolas’s first birthday.
Have a good rest of the day,
- Mauricio
Economic and Market Update
Recently, the financial markets have been very sensitive to changes in U.S. government policy, especially around tariffs. At first, the U.S. threatened to impose heavy tariffs on many countries, but then backed off for most of them — except for China, where tariffs were increased a lot. This sudden shift created a rare situation where U.S. stocks, government bonds, and the U.S. dollar all weakened at the same time, something RBC calls a "U.S.-off" environment. U.S. stocks have struggled more than global markets, partly because they had gotten very expensive after excitement around artificial intelligence. Although stock prices have corrected, they are still a bit higher than their long-term averages.
The main driver behind all this stress has been the start of a trade war. As I wrote last month, high tariffs on imports push prices up (inflation), which can hurt demand and slow down the economy. Because of this, investors now expect the economy to cool off, even more than they worry about inflation. That's why bond yields have dropped and the U.S. dollar has weakened compared to other currencies like the Canadian dollar. Investors are also worried about how unpredictable U.S. policies are and whether the country’s high fiscal deficits are sustainable.
A big question now is how the U.S. central bank (the Federal Reserve) will respond. Although many investors are hoping for interest rate cuts soon, RBC believes the Fed may be slower to act than the market expects. If inflation stays high, cutting rates too soon could make things worse by pushing prices even higher. Also, lowering rates by a little wouldn’t solve the bigger problem of higher import costs. The Fed will likely wait and move carefully, focusing more on keeping inflation under control rather than rushing to boost growth.
Overall, even though market ups and downs are likely to continue for a while, we believe staying patient and focusing on long-term fundamentals, like inflation trends and opportunities outside the U.S., will be better for investors than simply betting on quick interest rate cuts.
Spring
Wealth Planning Insights
After having lost most of their tax advantages over the years, Trusts have evolved into versatile tools that help families navigate complex financial and personal realities. Here are some modern ways trusts are commonly used in Canada today:
- Managing Asset Distribution in Complex Family Situations: Trusts are a powerful tool to control how and when assets are distributed, particularly in blended families, second marriages, or situations with vulnerable beneficiaries. They allow individuals to tailor the timing, conditions, and amounts of distributions to preserve family harmony and protect assets across generations.
- Tax Planning and Income Splitting: Trusts can help minimize taxes by distributing income among beneficiaries in lower tax brackets, by freezing the value of an estate, shifting future growth to heirs in a tax-efficient manner or for charitable purposes under an Estate plan.
- Providing for Dependents with Disabilities: Henson trusts are commonly used to ensure that loved ones with disabilities are financially supported without disqualifying them from government assistance programs.
- Blind trusts: for those of you running for office who won in yesterday’s election, the law requires you to sell or move certain investments into such trust, avoiding tax consequences and keeping your relationship with your advisor (myself).
Depending on your specific situation, needs and goals it may be a useful tool. Feel free to reach out to discuss if you think this could be beneficial for you and your plans.
Birthday
April 15th was Nicolas's first birthday. He's growing so fast and becoming more and more interactive, even if it means running after him all day.
Of course he was more interested in the wrapping paper, the bags, the balloons... until we cut the cake.
