To my clients:
It was an up week for North American stock markets with the Canadian TSX finishing up 1.7%; the U.S. Dow Jones Index up 2.2%; and the U.S. S&P 500 up 1.8%.
It has been a busy week as I am in the full throes of conducting annual client reviews; Trump has been inaugurated (demanding my attention to the policy initiatives and market response); I’ve attended a very interesting presentation by RBC’s Assistant Chief Economist; and I conducted a trade in discretionary client accounts (this morning).
With the preceding said, here are the relevant highlights in point form:
- To little surprise, President Trump hit the ground running by signing a host of Executive Orders to push through “most” of his promised agenda. The market has responded mostly positively as it continues to perceive this agenda as pro-growth.
- Missing from his first wave of Executive Orders was any action on the tariff front. While tariffs are undoubtedly coming, it may be the case that they will be of lesser magnitude and narrower scope than threatened.
- To the preceding point, Robert Hogue, RBC’s Assistant Chief Economist presented in our boardroom yesterday. While there were far too many highlights to list here, notable was his and RBC’s belief that Trump’s 25% tariff threat on Canada is unlikely to sustain at that rate. RBC’s base case presently stands at roughly half the threatened rate for 2025, although they admit nothing can be entirely ruled out. Also noteworthy was RBC’s continued observation of the relative strength of the U.S. economy in comparison to Canada (again noting the decline in per capita GDP in place since 2018).
- Regarding the relative economic divergence between the U.S. and Canada, I am considering a further modest shift in favour of U.S. equities and away from Canada in discretionary client portfolios.
- Lastly, I executed the sale of Visa in client portfolios this morning. The position was sold at $330/share, surpassing our analyst target of $322/share. I’m presently examining reinvestment opportunities and should have the funds redeployed next week.
That’s it for this week. All the best,
Nick
Nick Scholte, CIM, FCSI
Senior Portfolio Manager
Scholte Wealth Management
RBC Dominion Securities Inc. │ Tel: 604.257.7569 │ Fax: 604.235.9950
3200-1055 West Georgia │ Vancouver, BC │ V6E 3P3
Toll Free: 1.844.665.9900 │Email: nick.scholte@rbc.com
Visit Our Website: www.nickscholte.ca
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