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 June 27, 2025.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	26,692	0.7%	7.9%
U.S.	S&P 500	6,173	3.4%	5.0%
U.S.	NASDAQ	20,273	4.2%	5.0%
Europe/Asia	MSCI EAFE	2,654	3.0%	17.3%

Source: FactSet

• TSX closed lower in Friday afternoon trading, off worst levels. Sectors mixed. Canadian equities finished the week up 0.7% lagging US peers.
• Market processing several trade headlines. Market came off session highs in the early afternoon after Trump said he was terminating trade talks with Canada in response to digital service taxes; added he will let Canada know what the US tariff rate will be within a week. Treasury Secretary Bessent on Friday also signaled more flexibility on trade deadlines, saying most important deals should be concluded by Labor Day (vs a 9-Jul hard line).
• US equities finished higher in Friday trading, sharply rebounding off session lows in the last hour of trading. S&P 500 and Nasdaq logged fresh record highs while major indices posted strong weekly gains. Fiscal policy was another focus on Friday. Treasury Secretary Bessent asked Congress on Thursday to remove section 899 language after coming to agreement with G7 partners.
• Investment returns through the first half of the year have been reasonable, which is impressive considering the circumstances. On the one hand, this has served as a reminder that despite headlines that seem concerning and unnerving, markets can be resilient and it’s important to avoid being swayed by short-term developments. On the other hand, equity markets are now trading at or near all-time highs, suggesting expectations have also risen, leaving some room for disappointment and potential weakness should the economic and earnings trajectories not unfold as positively as markets seem to be expecting. We don't want to let complacency set in, and for these reasons we continue to remain vigilant despite a renewed sense of optimism.
• Tariff upheaval has triggered a renewed interest in global equity diversification as a hedge against volatility in individual markets. You can read the article “A world of opportunities?” in the Global Insight 2025 Midyear Outlook here.
•       

Economy

Canada

• Canada’s Consumer Price Index (CPI) grew at a steady 1.7% y/y in May, matching the prior month’s growth. The Bank of Canada’s (BoC) preferred inflation indicators, which exclude typically volatile food and energy prices, edged down to 3% y/y, above the BoC’s 2% target.
• Canadian retail sales rose by 0.3% m/m in April, suggesting to us that consumers remained resilient to tariffs at the start of the second quarter. Statistics Canada’s advance estimate points to a 1.1% m/m contraction in sales for May, likely reflecting increasing consumer hesitancy in the face of uncertain U.S. trade policy.

U.S.

• Treasury yields continue to move lower in June with markets increasing their Fed rate cut expectations through the remainder of the year. While federal fund futures are still pricing in two quarter-point rate cuts by the end of the year, rate cut expectations for July have risen to 28%, up from 8% just a week ago.
• U.S. new home sales dropped in May by the most in nearly three years as higher mortgage rates weighed on affordability, according to a report from the U.S. Commerce Department’s Census Bureau.

 

Further Afield

• The NATO summit held in the Netherlands confirmed that EU member states will increase their defense spending to 5% of GDP by 2035, except for Spain, which requested some flexibility. This is more than double the current spending target. The European Commission expects this additional spending could boost GDP growth by 0.3–0.6 percentage points in the next three years.
• News on trade negotiations has been mixed. China has made it clear it will not sign any agreement unless it gets concessions from the U.S., which could include easing technology export controls and allowing more Chinese investment in the United States.

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

Regards,

Shiuman

 

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