Below is a summary of some of the relevant news items from the Capital Markets and the Economy from the past week extracted from RBC Global Insights and FactSet Research.

You can catch up on the past four weeks’ Weekly Update in the link to my Blog.

Read my latest Smart Investor newsletter on my website. The Q1 2025 edition covers Market Review for 2024, a discussion about the main themes for 2025, and some long-term multi-decade trends. In Shiuman’s Corner find out what my favourite books were from last year.

 

Markets

Market scorecard as of close on Friday February 14, 2025.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	25,483	0.2%	3.1%
U.S.	S&P 500	6,115	1.5%	4.0%
U.S.	NASDAQ	20,027	2.6%	3.7%
Europe/Asia	MSCI EAFE	2,448	2.6%	8.2%

Source: FactSet

• TSX closed lower on Friday afternoon trading, near worst levels. Most sectors down. TSX eked out a 0.2% weekly gain. Canadian dollar ended higher against USD above US$0.70.

• US equities were narrowly mixed in very quiet Friday trading. However, S&P 500 and Nasdaq capped off weekly gains for first time in three weeks.

• European equities have been notable outperformers year to date, up over 9% (>10% in USD terms). There have been several drivers of this, in our view, including the potential resolution to the war in Ukraine. Moreover, after positioning reached extremely bearish levels at the end of 2024, asset class flows data suggests that short-covering has also played a role.

• Asia Pacific equity markets traded mixed during the week, with Hong Kong’s Hang Seng Index a standout. The Hang Seng Index was up more than 4% last week, with its fifth consecutive weekly gain. The index is up more than 18% since the Jan. 13 low. Much of the rally is being driven by technology names on optimism surrounding China’s artificial intelligence (AI) capability.

• While Washington, D.C. will likely capture a lot more business press headlines this year and policy developments could generate volatility, we think good old fashioned earnings trends will determine the U.S. equity market’s fate over the mid and long term.

• • You can read the latest commentary about the stock market and latest earnings outlook for the year in our Global Insight Weekly (February 13, 2025) here.

 

Economy

Canada

• Headline Consumer Price Index (CPI) growth edged higher to 1.9% year-over-year in January from 1.8% in December, with the acceleration primarily reflecting a jump in energy price growth (+5.3%), partially offsetting the impact of the federal GST/HST holiday that began mid-December.

• Canada’s job market appears to be stabilizing. The country recorded a second consecutive month of strong job growth in January with 76,000 net new jobs created. The employment rate, which was previously on a downward trend, ticked higher again and the jobless rate unexpectedly fell to 6.6%.

• The BoC’s response to potential tariffs will be “a dynamic process.” How the BoC responds to such a shock will depend on the balance between negative growth effects and inflationary pressure, as well as the scale of fiscal support offered by the government.

U.S.

• Combined with resilient strength in the labor market, last month’s price pressure and ongoing concerns about the impact from new tariffs suggest to us that the Federal Reserve will likely keep interest rates elevated for the foreseeable future. We think the higher-for-longer narrative will simply be extended, at least until Fed officials feel more comfortable about the path for inflation.

 

Further Afield

• The next possible catalyst for Europe is the German federal election on Feb. 23, which offers a chance for political stability to return to Europe’s largest country, as well as the prospect for pro-growth reforms from unlocking Germany’s considerable fiscal spending capacity.

• Chinese retailers are seeing a sustained drop in U.S. sales after U.S. President Donald Trump announced that parcels from China valued under US$800 would no longer be exempt from customs duties.

 

Notes About Companies in Model Portfolio

• Intact Financial (IFC) reported Q4-2024 results with net operating income per share rose 23% to $4.93, with robust underwriting results, as well as investment and distribution income increasing by 6% and 13%, respectively. Net income was $667m up 26% compared with same quarter previous year.

• Fortis (FTS) released its 2024 fourth quarter and annual financial results. Net earnings were $1.6 billion, or $3.24 per common share for 2024, compared to $1.5 billion, or $3.10 per common share for 2023. Growth in earnings was primarily driven by rate base growth across utilities. Fortis increased the dividend 6.1%, in line with earnings growth.

 

Feel free to contact me with any questions and/or to discuss investment ideas.

I appreciate the opportunity to serve you and look forward to continuing to help you accomplish your long-term financial goals.

 

Regards,

Shiuman