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 May 2nd, 2025.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	25,043	1.3%	1.2%
U.S.	S&P 500	5,687	2.9%	-3.3%
U.S.	NASDAQ	17,978	3.4%	-6.9%
Europe/Asia	MSCI EAFE	2,536	3.1%	12.1%

Source: FactSet

• TSX finished higher in Friday afternoon trading, near best levels. Most sectors higher. Canadian equities recorded +1.3% weekly gains, fourth consecutive week of advances. US tariff reprieve on Canadian auto-parts was the top story. Trump administration announced a two-year pause for tariffs on CUSMA compliant auto-parts. PM Mark Carney to visit Trump at the White House on Tuesday.
• US equities were higher in Friday trading as stocks ended a bit off best levels. S&P 500 posted 9th straight gain. Index has gained more than 10% during that period, and now above April 2nd close just before Trump's reciprocal tariff announcement. Stocks also posted back-to-back weekly gains for first time since January.
• Global stock markets finished the month close to where they started. That is an impressive feat given what transpired. More specifically, the global stock market fell nearly 10% during the first week of April as the U.S. unveiled its initial reciprocal tariff plan.
• The global market subsequently recovered those losses, finishing the month marginally higher in constant currency terms (i.e. ignoring the effect of the Canadian dollar, which itself moved higher). Moreover, bond yields and currencies also saw relatively large moves. Uncertainty remains elevated, but the past month should serve as a reminder that while periods of heightened volatility can be unnerving, it is best to resist the urge to react to the noise and avoid straying too far from targets in investment plans.

Economy

Canada

• Canada’s economy contracted in February as tariff-related uncertainty began to impact activity. GDP declined by 0.2% m/m in February, below the Bloomberg consensus estimate of no growth in the month. Softening business and consumer sentiment in the face of uncertainty also likely deepened the slowdown, with transportation and warehousing activities and residential construction weakening.

• This puts the Canadian economy on track to gain 1.5% annualized in Q1 2025, below both RBC Economics’ and the Bank of Canada’s (BoC) forecast of 1.8%. In our view, a weaker economic outlook poses a challenge to the central bank’s policymakers, who paused their monetary easing cycle in April after seven consecutive policy rate cuts. The BoC’s next meeting is June 4, at which futures markets are currently split on the likelihood of another rate cut.

U.S.

• Recently released data reflected a weaker U.S. economy. The trend was notable in sentiment surveys, often referred to as “soft data,” as well as the so-called hard data that measures behavior. The weaker sentiment was reflected in GDP, which saw the U.S. economy contracting in Q1 at a 0.3% annualized rate.
• Friday morning’s nonfarm payroll report was an upside surprise for April, although following downward revised growth in both March and February. The unemployment rate held steady in April at 4.2%. The print drives home the point that hiring has slowed as firms grapple with significant uncertainty from tariffs, and is expected to weaken further in the back half of the year as the impact of tariffs permeates.

Further Afield

• The euro area’s flash estimate of GDP growth came in at 0.4% q/q, double both the consensus forecast and Q4 2024 growth.

• According to an RBC Capital Markets analysis, national data releases from Germany, Italy, and Spain point to solid growth in consumer spending, possibly driven by a normalization of the savings rate and the expectation of fiscal stimulus in Germany

Notes About Companies in Model Portfolio

• Apple (AAPL) announced on Thursday financial results for its fiscal 2025 Q2 ended March 29, 2025. The Company posted quarterly revenue of $95.4 billion, up 5 percent year over year, and quarterly diluted earnings per share of $1.65, up 8 percent year over year.
• • “Apple management highlighted that for 3Q 25, the majority of iPhones sold in the US will be sourced from India, while Vietnam will be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products sold in the US. Vast majority of the products sold outside US will continue to be sourced from China,” said a report from JP Morgan.
• Berkshire Hathaway (BRK.A/BRK.B) released Q1 earnings on Saturday. While most of the company's segments posted solid operating earnings growth, significant losses from the Southern California wildfires during the period hit the insurance business. When including the effects of the investment losses and other adjustments, reported operating earnings decreased 63.8% to $4.6 billion from $12.7 billion in the first quarter of 2024.
• • At a question and answer session that preceded Berkshire Hathaway’s Annual Shareholders Meeting, Warren Buffett, Berkshire’s Chairman and CEO announced that he was going to recommend to Berkshire’s Board of Directors at its meeting to be held on the next day that Greg Abel, Berkshire’s Vice Chairman Non-Insurance Operations be appointed Berkshire’s Chief Executive Officer to become effective on January 1, 2026. They did. Warren Buffett will remain the Chairman of the Board of Directors.
• Brookfield Infrastructure Partners L.P. (BIP.UN) announced on Wednesday its results for Q1 ended March 31, 2025. The company reported net income of $125 million for the three-month period ended March 31, 2025 compared to $170 million in the prior year.
• • “With broad market concerns relating to the economic impact of trade/tariff policy changes, BIP investors should find comfort in BIP's cash flow profile (85% of its FFO is contracted/regulated, and protected from/indexed to inflation) that ultimately underpins the stability of its diversified infrastructure's financial performance,” according to RBC Capital Markets report.
• Canadian National Railway (CNR) reported on Thursday its financial and operating results for Q1 ended March 31, 2025. Revenues of C$4,403 million, an increase of C$154 million, or 4%. Diluted earnings per share (EPS) of C$1.85, an increase of 8%.
• Element Fleet Management (EFN) reported on Wednesday Q1 2025 results. Net revenues grew 5% year-over-year driven by growth across all categories despite an unfavourable foreign currency translation impact of $17 million. On an adjusted basis, diluted EPS of $0.28 in Q1 2025 represented a 8% year-over-year increase.
• Eli Lilly (LLY) reported Q1 2025 results on Friday with sales of $12.73bn (+$59mm) and EPS of $3.34 (+$0.08). Sales for Mounjaro (diabetes) and Zepbound (obesity) rose dramatically to reach $6.2 billion, up year over year from $2.3 billion.
• Visa (NYSE: V) announced on Tuesday its fiscal second quarter 2025 financial results. Net revenue for Q2 was $9.6 billion, up 9% from same period last year.
• • “While there remains much uncertainty in the market, Visa’s results offer a few clues into the health of the consumer with aggregate spending volumes in the US remaining relatively consistent in F2Q25, with some spend categories shifting, and cross-border volumes showing some moderation,” according to RBC Capital Markets report.

 

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

 

Regards,

Shiuman

 

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