The month of April has come and gone, and so too has some of the drama and market volatility resulting from the threat of a global trade war. As we move through May, we wanted to share a brief update on what’s happened, how markets have responded, and how we’ve positioned your portfolio.

 

Global stock markets ended April close to where they started, which is notable given the ups and downs along the way. Early in the month, markets fell sharply — nearly 10% — after the U.S. introduced new tariffs. Fortunately, those losses were largely recovered by month-end. This kind of market swing can be unsettling, but it’s a good reminder that staying focused on long-term goals that align with your financial plan remains the best strategy.

 

In Canada, voters elected a minority Liberal government. While it’s still early, there are indications this government may lean more toward the centre, with a stronger focus on economic policy. Areas of likely attention include infrastructure, housing, defense spending, interprovincial trade barriers, and a potential moderation of immigration policy.

 

On the trade front, the U.S. administration appears to be softening its tone. Some tariffs have been reduced or temporarily suspended, and certain exemptions have been made for key industries like electronics and autos. This shift suggests a more constructive approach to trade than we saw earlier in the year.

 

Given this backdrop, we’ve made several adjustments to your portfolio in recent. In the Fall of 2024, we reduced exposure to sectors most at risk from trade uncertainty—such as auto parts and apparel—by selling names like Magna and Lululemon. At the same time, we increased your portfolio’s flexibility by adding broad U.S. market exposure through an ETF, anticipating further policy shifts and volatility.

 

When tariff details emerged in early April, moving the markets to the downside, we sold the broad U.S. ETF and reallocated capital into high quality companies that had seen steeper than average declines. These included Microsoft, Honeywell, Xylem (a water infrastructure company), Amphenol (which specializes in electronics and robotics), and Amazon.

 

While market sentiment has improved somewhat, important questions remain — particularly around the lasting impact of U.S. tariffs. The latest U.S. GDP data showed a spike in imports, which may reflect businesses trying to buy ahead of tariffs. Whether this trend continues depends on how long the trade measures stay in place and whether tensions cool further.

 

In your portfolio, we remain focused on quality, diversification, and long-term value.