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 Q2 2025 edition covers Market Review for Q1 2025, the impact of tariffs on markets, and how to position your portfolio during a time of disruption. Shiuman’s Corner is about the art of retail in Japan.

Markets

Market scorecard as of close on Friday May 30, 2025.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	26,175	1.1%	5.9%
U.S.	S&P 500	5,912	1.9%	0.5%
U.S.	NASDAQ	19,114	2.0%	-1.0%
Europe/Asia	MSCI EAFE	2,600	0.8%	15.0%

Source: FactSet

• TSX closed lower in Friday afternoon trading, off worst levels. Most sectors lower. Canadian equities ended the week up 1.1%, bringing May's gain above 5%.
• US equities finished mostly lower in Friday trading, ending a bit off best levels. Nevertheless, major indices logged modest weekly gains, while S&P and Nasdaq notched their best months since Nov-23. Treasuries were mostly firmer with the curve steepening.
• Equity markets have bounced back smartly since April’s tariff-related selloff. Technical analysis suggests markets could climb higher into early-to-mid-Q3, but investors should keep a close eye on the behavior of the U.S. dollar, and more importantly, 30-year and 10-year U.S. Treasury bond yields. If you are interested in learning more about the technical analysis of the current market in S&P 500, you can read the article by Robert Sluymer, Technical Strategist.

Economy

Canada

• For the first time since 1977 and just the third time in the history of the country, the reigning monarch delivered Canada’s Speech from the Throne. Read by King Charles III in Ottawa on Tuesday, the speech officially opened Parliament and outlined the legislative priorities of newly elected Prime Minister Mark Carney’s Liberal government.
• While financial details will need to wait for the federal budget slated for release this fall, the Throne Speech reiterated many of the Liberals’ campaign promises, including a 1 percentage point cut to the lowest personal income tax rate, sales tax breaks for first-time homebuyers, and removal of “all remaining federal barriers to internal trade and labour mobility by Canada Day”.

U.S.

• Despite the pause in reciprocal tariffs on China, trade volumes have yet to show a meaningful rebound, raising new questions about the underlying health of global supply chains. Shipping volumes to the U.S. from China, measured as a 15-day rolling total, peaked in mid-April, likely driven by prebuying ahead of anticipated tariff actions.      
• U.S. consumer confidence rebounded in May. The Conference Board’s Consumer Confidence Index rose 12.3 points to 98.0, the largest gain in four years, as trade tensions eased.

Further Afield

• Having announced on May 23 that the tariff rate on U.S. imports from the EU would rise to 50% on June 1, U.S. President Donald Trump postponed this to July 9 in an effort to reach a deal. The EU said that it had agreed to accelerate trade negotiations with the U.S., with a European Commission spokesperson saying, “There’s now a new impetus for the negotiations.”
• Most Asian equity markets rose on Thursday following a U.S. federal trade court ruling against President Donald Trump’s widespread use of tariffs under an emergency powers law. We believe the court order could delay the implementation of high tariffs, giving companies more time to adjust their supply chains and operations. However, the ruling does not prevent the Trump administration from imposing further tariffs under different trade provisions, and the White House said it would appeal the decision.

Notes About Companies in Model Portfolio

• Costco Wholesale Corporation (COST) announced Thursday its operating results for the third quarter (twelve weeks) and the first 36 weeks of fiscal 2025, ended May 11, 2025. Net sales for the quarter increased 8.0 percent, to $61.96 billion, from $57.39 billion last year. Net sales for the first 36 weeks increased 8.2 percent, to $185.48 billion, from $171.44 billion last year. Net income for the quarter was $1.90 billion, $4.28 per diluted share, compared to $1.68 billion, $3.78 per diluted share, last year.
• Royal Bank of Canada (RBC) reported on Thursday Q2 2025 results. Net income was $4.4 billion for the quarter ended April 30, 2025, up $0.4 billion or 11% from the prior year. Diluted EPS was $3.02, up 10% over the same period. Strong earnings growth in Personal Banking, Wealth Management and Insurance, and higher results in Commercial Banking, were partly offset by lower results in Capital Markets.

 

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

Regards,

Shiuman

 

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