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 March 7, 2025.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	24,759	-2.5%	0.1%
U.S.	S&P 500	5,770	-3.1%	-1.9%
U.S.	NASDAQ	18,196	-3.5%	-5.8%
Europe/Asia	MSCI EAFE	2,508	3.5%	10.9%

Source: FactSet

• TSX closed higher on Friday, a bit off best levels. Broad gains across sectors. Canadian equities finished 2.5% lower this week, with losses driven by tech, energy, and financial.

• US equities were higher in choppy Friday trading as stocks finished a bit off best levels. The gains came after Thursday’s selloff that saw S&P record its biggest pullback of 2025 for the second time this week. S&P and Nasdaq both posted third-straight weekly decline, worst weekly performances since September.

• Global equity markets have been weaker in the face of developments on tariffs and a deterioration in consumer sentiment, with signs that investors are getting increasingly uncomfortable. Yet the equity market declines have been relatively modest thus far. Notably, the U.S. stock market has underperformed other markets including those in Canada, Europe, and Asia.

• It is possible the market may see some relief in the short-term given the recent tariff reprieve. Better yet is the possibility of a less threatening tariff outcome by April should some favourable negotiations transpire in the weeks to come. However, the risks of a longer lasting trade war are high enough that caution is warranted in our view, even if the markets have fared better so far than we would have expected.

Economy

Canada

• Canada’s economy was improving ahead of the tariff threats. Canadian GDP growth accelerated to a 2.6% annualized pace in Q4, well ahead of consensus expectations and the Bank of Canada’s (BoC) forecast.

• Employment was little-changed in February (+1.1k) on relatively soft underlying details - a 20k drop in full-time work offset by a 21k increase in part-time jobs. The unemployment rate held steady at 6.6% after falling over December and January from a 6.9% recent peak in November.

U.S.

• U.S. employers in February announced plans to reduce employee headcounts at the fastest pace since the early days of the pandemic amid government job cuts as the Trump administration shrinks the federal workforce.

• Americans are falling behind on their car payments at the fastest rate in decades as high interest rates, stubborn inflation, and a slowing economy make it harder for consumers pay their bills.

Further Afield

• A seismic shift appears to be on its way in Germany, as the country seems willing to implement structural changes it has resisted for a generation. They have also agreed to change the fiscal debt brake to enable defence spending to be separated out from the country’s balanced budget requirements, as the EU recommended for member states. RBC Capital Markets points out that this leaves defence spending unconstrained and estimates the plan would boost GDP growth.

• This past week China commenced its annual Two Sessions, a high-profile gathering of top decision makers to outline the nation’s economic roadmap for the year. The government retained its GDP growth target at “around 5.0%,” unchanged from last year.

Notes About Companies in Model Portfolio

• Costco Wholesale Corporation (COST) announced its operating results for the second quarter (twelve weeks) and the first 24 weeks of fiscal 2025, ended February 16, 2025. Net sales for the quarter increased 9.1 percent, to $62.53 billion, from $57.33 billion last year. Net sales for the first 24 weeks increased 8.3 percent, to $123.52 billion, from $114.05 billion last year.

 

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