Blog for Friday, May 2, 2025

 

Election, tariffs, fun and sun.

 

I am sitting in the Barbados airport lounge waiting for my flight home to Toronto.  I’m watching cricket on the television.   I really enjoy the sport although I know nothing about the rules.  My British dad grew up playing it and my Aussie family often spend a day or weekend at the Melbourne Cricket Ground.  So much of the British empire plays the sport and I have a desire to learn the sport.  I am sure there is some league in Durham Region to learn.  I know there are a couple of cricket pitches in Brampton that I pass on the way to Collingwood.  Clearly the sport is a becoming a bigger part of some communities in the region.

 

Denise and I are returning from a few days away in Barbados. Nice country.  Very nice people.  We stayed in a nice all inclusive in the St Lawrence Gap, which is essentially a party zone with lots of night life and restaurants.  It is not quite our scene anymore and it was great to experience the area and food.  We also made our way to the West coast to have lunch at the Fairmont.  The area is called Holetown and is the original settled area in Barbados.  The area is considerably more upscale.  Different again.  We would come back and would probably look to golf at some of the beautiful golf resorts in the area.

 

Unfortunately, I was fighting a cold the whole time, which I acquired over the Easter long weekend visiting Denise’s family in Hearts Delight, Newfoundland.  Denise’s sister, Marilyn, was also celebrating her birthday that weekend.  It is always fun to have dinner with friends in St John’s, do some great hiking in the area, and visit family.  We only get down there perhaps once a year at best.  Fortunately, the weather was good, although not quite Barbados level weather.

 

We watched the Canadian election unfold through online channels.  Very interesting results.  The Liberals almost got a majority with the help of the destruction of the Bloc in Quebec and the NDP across the country.  I actually predicted the results and outcome of the Bloc and NDP, and I have witnesses.  Ha.

 

Hopefully Prime Minister, Mark Carney, will be able to mend fences with Alberta as well as negotiate a decent deal with the USA.  He heads to the USA next Tuesday for talks.  Priority one in my opinion is dealing with Trump and his tariffs.  Not an easy task.

 

Speaking of the USA, first quarter GDP came in soft at -0.3%.  Of course, Trump blamed Biden for that one and most likely for the next quarter’s softness to come.  How long is this dude going to blame the old President for the USA woes?  Canada’s GDP was also soft for February at -0.2%, to be expected with the tariff situation.  Of course, that was rightly blamed on Trump or maybe that should be Biden’s issue to bear?

 

It will be interesting to see the GDP numbers going forward as it is my opinion that consumers have likely pulled purchases forward ahead of the implementation of the tariffs.  This means that the current GDP numbers are artificially high, which is a worry considering they were negative.  Businesses have also pulled inventory purchases forward to stock up before tariffs hit.

 

In other news, Trump is giving a credit of 15% to auto manufacturers to offset the 25% tariffs on USA made cars.  There is some phase out period over a couple of years to allow the car makers to bring manufacturing back onshore.

 

USA employment data proved not bad this morning.  Job numbers were decent as was the unemployment rate.  This should alleviate investor concern a little at least in the short term.

 

Events and news change daily with the result being much confusion in the investment markets and lack of direction.  I continue to hold much higher levels of cash in portfolios at the expense of holding equities.  I don’t feel it is prudent to jump in and trade the market with so much uncertainty and lack of direction on USA trade policy.  At this point it would seem to me to be gambling instead of investing with prudence, and I don’t think you want me gambling with your money.

 

There is no way to know where the USA tariff situation is going, when it might improve, or even when it might end.  It is going to take some time before the economic data reflects the broader, global impacts, although some of it showed up this week in the GDP data. 

 

It is also going to take some time before higher prices and empty shelves show up in the USA and hurt the American consumer.  Trump’s approval rating is already at the lowest level in history for the first 100 days in office and that’s before the full impacts are felt by the American consumer.  If his disapproval rating holds or even gets worse, there is a risk to Trump and the Republicans that the Democrats take back seats in both the House and Congress in the mid-term elections scheduled for 18 months from now.  A lot of damage can be done between now and then, however. 

 

I am looking forward to May and some decent weather in Ontario.  There is a lot of work to be done in the gardens in Whitby and Collingwood.  Gardening is one of Denise and my favourite things to do if you didn’t know that.  We love seeing what comes up in the Spring and to amend and modify the gardens throughout the year.

 

I have to say it is also a nice treat to just walk out the door with the dogs in the morning and not have to get us all bundled up for the cold.  I am so thankful for the early morning light too.   The pooches are doing well.  Monty is growing big and Matilda tolerates his puppy ways.  It seems to work.

 

I hope you have a chance to get out and enjoy some better weather as well, and that you are renewed by the changing seasons.

 

Be well until next time.

 

Happy Spring.

 

Cheers.

 

Miles…