May 9, 2025, Newsletter

Dear Friends,

Tangents: Happy Friday.

May 9, 1960: the first birth control pill is approved by the US FDA, providing a revolutionary method for family planning and giving women greater control over reproductive health.
On May 9, 1994, South Africa’s newly elected parliament chose Nelson Mandela to be the country’s first black president.

Candice Bergen, actress, b.1946.
Billy Joel, singer/songwriter, b.1949.

Upcoming movie highlights ‘the most important place on Earth’
“Ocean with David Attenborough” is a new documentary that chronicles the wonders of the ocean and the threats it faces. The film’s release this week coincides with the veteran broadcaster’s 99th birthday.

7 myths about the Vikings that are (almost) totally false
All that you’ve heard about the Vikings may not be true. Read More.

Invasive Asian needle ants are surging in US Southeast — and their bite can trigger anaphylaxis
Asian needle ants found in the southeastern states of the U.S. have been spreading north and west for years, but experts now consider them to be a medically important pest and urge caution. Read More.

Scientists discover how to use your body to process data in wearable devices
Scientists have discovered a way to use live tissue as a computational reservoir to solve problems and potentially predict chaotic systems like the weather. Read More.

PHOTOS OF THE DAY

Canada goslings enjoy the warm sunshine in a pond at Kew Gardens, in west London
Photograph: Imageplotter/Alamy Live News

A sika deer pauses under blossom at Nara Park, Japan. The park, established in 1880, is home to many wild animals and plant species.
Sika deer, a species native to East Asia and numbering more than 1,200, are among the symbols of the park and live among the sakura trees
Photograph: Anadolu/Getty Images

A purple sunbird perches on a flower stem on the outskirts of Ajmer, India
Photograph: Himanshu Sharma/AFP/Getty Images
Market Closes for May 9^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
It takes time to make money.
Canada
(MT Newswires)
The Toronto Stock Exchange on Friday made it four winning sessions in a row as BMO’s Douglas Porter seemed to catch the mood of investors in noting an easing in global trade tensions and that the Canadian economy is “holding up a touch better” than expected, though he noted the uncertainty around tariffs continues.
Buoyed too by higher commodity prices, the resources-heavy S&P/TSX Composite Index closed up 103.68 points at 25,357.74, adding to the 300 points gained over the prior three days.
Sectors were mixed, with the gains led by Telecoms, up 2.6%, and followed by Energy, up 2%.
Limiting gains was the Information Technology sector, down 1.5%.
Porter, chief economist at BMO Capital Markets, in his weekly ‘Talking Points’ noted at least three developments this week were widely interpreted as turning down the temperature on the brewing global trade war, providing modest support for equity prices.
Probably most important, Porter said, the United States and China agreed to talk, without either losing face, and some form of negotiations begin this weekend in neutral Switzerland.
Second, with much fanfare, the U.S. and U.K. agreed on a preliminary deal to dial down tariffs on metals and autos, perhaps providing a framework for others.
And, finally, Canadian PM Mark Carney’s “high-stakes meeting” with President Trump at the White House “at least set the stage for less fractious relations between the two massive trading partners” than seen for four months.
“The calmer tone is a small positive, Porter added. However, Porter said “while all these steps are indeed incrementally positive, it really doesn’t add up to much progress”.
He added, “The stark reality is that overall U.S. tariffs have barely budged, with the weighted average still hovering at levels no one has seen in their lifetime.
And, from our perspective, the U.K. ‘deal’ was arguably bad news.
Even with some concessions, Britain is still left with a base-line tariff rate of 10%, and this is for one of the few major economies that runs a trade deficit with America.
In other words, all others, including penguins, but excluding USMCA-compliant goods, will be dealing with a minimum tariff rate of 10% for the foreseeable future.
And those nations running significant trade surpluses with the U.S. are likely looking at a higher base rate.
The U.K. deal normalized the abnormally high base tariff rate, not good.”
Similarly, Porter said BMO’s big takeaway from the Carney and Trump meeting was the President’s telling response to a journalist question on why Canada couldn’t say or do anything to get tariffs lifted: “It’s the way it is”.
Porter said while words are clearly not policies, the President was “decidedly lukewarm” on the future of USMCA, seeming to even question whether it need exist.
Somewhat offsetting those concerning remarks, he also hinted that Canada may not face any additional measures.
“So,” Porter added, “tariffs on metals and autos are here to stay, as well as on non-USMCA-compliant goods, but that maybe it.
If that’s where things settle, the economy faces something right between the Bank of Canada’s two scenarios, and perhaps slightly firmer than our current base case projection.”
Canada, Porter noted, remains the single biggest U.S. export destination, absorbing US$351 billion in the 12 months to March.
Meanwhile, Porter noted Canada began to see the first “hard” economic results for April this week.
“Our take so far is that while conditions may be holding up a touch better than we expected, it’s still not good.”
He noted employment eked out a modest 7,400 gain but said that was “flattered” by a 37,100 increase in public administration, likely due to election workers.
In other words, Porter said, the economy just saw back-to-back underlying job losses of around 30k, with all of the latest drop in manufacturing payrolls.
He added the spread between Canada’s 6.9% jobless rate and the 4.2% in the U.S. is now a “towering” 2.7 ppts, matching the widest gap of the past 24 years, aside from some results during Covid.
Porter also noted home sales are “slumbering” amid the economic uncertainty.
He said: “One major retailer did report that consumers have been resilient so far, albeit against a backdrop of the country’s oldest retailer sadly in the throes of liquidation.
In sum, the economy has perhaps held up slightly better than our weak and below consensus call but still leaving the Bank of Canada in a position to cut further, with the next meeting in early June very much a live option.”
Canada employment data will push the BoC to cut by 25bps in June, according to David Doyle, head of economics at Macquarie.
He noted the OIS market probability of a rate cut for June 4 increased to about 60-65%, up from near 45% yesterday.
Doyle said whether the BoC proceeds with a cut may hinge on other incoming data including CPI for April due on May 20 and real GDP for Q1, due on May 30.
“Overall, we anticipate intermittent cuts totaling 75 bps by year-end, pushing the Overnight rate down to 2.0%.”
Of commodities, gold prices rose late afternoon on Friday following two days of losses as the dollar fell off the highest in a month ahead of trade talks between the US. and China.
Gold for June delivery was last seen up US$28.70 to US$3,334.70 per ounce.
Also, West Texas Intermediate crude oil closed higher on Friday on hopes global trade tensions will ease as the U.S. and China ready to meet in Switzerland on the weekend for their first talks since the pair last month imposed punishing tariffs on each other’s exports that have nearly halted all trade between the world’s two largest economies.
WTI oil for June delivery closed up $1.11 to settle at US$61.021 per barrel, while July Brent crude was last seen up $1.10 to US$63.94.
By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite rose 0.4%, with six of 11 sectors higher, led by communication services stocks.
As of market close, 132 of 218 stocks rose, while 84 fell.
Air Canada led the advances, rising 15%, while Pembina Pipeline Corp. decreased 5.9%.
Markets at a Glance:
* S&P/TSX Index rose 0.4% to 25,358
* Six of 11 sectors rose
** Communication services gained, up 3.6%
** Information technology declined, down 1.7%
* Crude oil rose 1.8% to $61/bbl
* Natgas rose 5.5% to $3.79/mmbtu
* Gold rose 0.9% to $3,335/oz
* Silver rose 1.1% to $33/oz
Advancers:
* Air Canada (AC CN) +15%: Air Canada Shares Jump After 1Q Ebitda Beat: Street Wrap
* Lundin Gold Inc. (LUG CN) +14%: Lundin Gold Jumps on Dividend Hikes and Adjusted EPS Beat (1)
* NFI Group Inc. (NFI CN) +13%: Bus Manufacturer NFI Group Rises as 1Q Revenue Climbs 16% (1)
* Algonquin Power & Utilities Corp. (AQN CN) +9.7%: Algonquin Power Shares Gain as Cost Cuts Lead to Q1 Beat (1)
* SSR Mining Inc. (SSRM CN) +7.7%
Decliners:
* Pembina Pipeline Corp. (PPL CN) -5.9%: Pembina Falls as Pipeline Tolls Seen Falling Post Regulation (1)
* NGEx Minerals Ltd. (NGEX CN) -4.6%
* Trisura Group Ltd. (TSU CN) -4.1%
* Definity Financial Corp. (DFY CN) -3.5%: Definity Financial 1Q Insurance Revenue Beats Estimates
* Tilray Brands Inc. (TLRY CN) -3.3%
US
By Rita Nazareth
(Bloomberg) — Wall Street ended the week on a more cautious note, with stocks and bonds fluctuating as the world’s two largest economies get ready to kickstart their trade negotiations.
Investors refrained from making riskier bets on speculation that while discussions between Chinese and American officials could represent a diplomatic icebreaker, a comprehensive commitment would only come to fruition after several rounds of talks.
Following a rapid $6 trillion surge in the S&P 500 from the brink of a bear market, action has been more muted in recent days.
The gauge closed little changed on Friday.
Traders around the world have been eager for any signs of easing in the tariff war that has roiled markets and raised risks of a global economic downturn.
President Donald Trump floated an 80% tariff on China ahead of negotiations due to begin Saturday as he urged the nation to do more to open its markets to US goods.
“This weekend’s developments will probably be binary for markets, but don’t expect a quick resolution to US-China trade tensions just yet,” said Jose Torres at Interactive Brokers.
“I’m expecting many ups and downs going forward as Washington and Beijing make attempts to meet in the middle while also looking to secure their own economic interests.”
Trump’s team has set a list of roughly 20 partners as the focus of early negotiations, people familiar with the matter said.
The group includes nations such as Japan, South Korea and Vietnam, all top sources of US imports where Trump wants to shrink the trade deficit.
It also encompasses comparatively minor partners like Fiji, Lesotho and Mauritius.
“Markets continue to be reactive to trade headlines,” said Mark Hackett at Nationwide.
“We are likely in a sideways period of volatility until we begin to get tangible, calculable outcomes.
Nobody knows the ultimate outcome, so this is the time to remain informed and vigilant, but not reactive or emotional.”
The S&P 500 and the Nasdaq 100 were little changed.
The Dow Jones Industrial Average slid 0.3%.
Across the Atlantic, Germany’s DAX Index became the first major European gauge to surpass its March peak, recouping all declines sparked by Trump’s trade war.
The yield on 10-year Treasuries was little changed at 4.38%.
The Bloomberg Dollar Spot Index lost 0.2%, while posting best week since March.
Even as the US takes steps toward trade negotiations, the stunning American stock rebound is likely over, according to Bank of America Corp.’s Michael Hartnett.
He doesn’t see further gains as investors “buy the expectation, sell the fact.”
About $24.8 billion was redeemed from US stocks in the past four weeks, the biggest in two years, according to the note from BofA citing EPFR Global data.
Billionaire Barry Sternlicht said the economy will likely weaken even though the stock market has bounced back from Trump’s major tariff announcement in early April.
“The markets have recovered, shockingly, to pre-Liberation Day highs, but that doesn’t really feel right,” Sternlicht said Friday on an earnings call for Starwood Property Trust Inc., where he is chairman and chief executive officer.
“Things like travel are clearly off.”
With talks between the US and China about to start, trillions of dollars are hanging in the balance for American companies.
The average member of the S&P 500 made 6.1% of its revenue from selling goods in China or to Chinese companies in 2024, according to an analysis from Bloomberg Intelligence’s Gina Martin Adams and Gillian Wolff.
“The bottom line is that if the US has to decouple completely from China, it will result in a significant decline in earnings for S&P 500 companies no longer selling products to Chinese consumers,” Torsten Slok, chief economist at Apollo, wrote.
Meantime, a stock-market indicator has entered a phase historically associated with the worst return prospects for the S&P 500 after trade fears gripped financial markets and dimmed Corporate America’s outlook for profit growth.
The Equity Market Regime Model, a Bloomberg Intelligence model that tracks the benchmark stock gauge and clusters periods into three phases — accelerated growth (green), moderate growth (yellow) and decline (red) — fell into the cautious red zone in
March and April, according to data compiled by BI’s Adams and Wolff.
The seven prior instances have been associated with a 5.6% average drop in the S&P 500 in the next 12 months.
The arguments between bulls and bears remain intense, with rational arguments on both sides, according to Hackett at Nationwide.
“Bulls argue that peak uncertainty is behind the market, corroborated by improving trade dynamics, strong price action, and better-than-feared earnings,” he said.
“The bear case highlights the headwinds facing economic and earnings momentum in the coming quarters, with earnings estimates receding.”
In the absence of relevant economic data Friday, investors waded through a raft of remarks from central bank officials.
Federal Reserve Governor Adriana Kugler said that policymakers should hold rates for now amid a stable economy and tariff uncertainties.
Her colleague Michael Barr warned trade policies could put officials in a difficult position by generating inflationary pressures and higher unemployment.
Fed Bank of Richmond President Tom Barkin said not all firms can raise prices on tariffs.

Corporate Highlights:
* US prosecutors and regulators investigating a $32 million deal between CrowdStrike Holdings Inc. and a technology distributor are probing what senior company executives may have known about it and are examining other transactions made by the cybersecurity firm, according to two people familiar with the matter.
* Semiconductor Manufacturing International Corp., China’s leading chipmaker, warned sales could fall as much as 6% this quarter because of production disruptions.
* Taiwan Semiconductor Manufacturing Co.’s revenue jumped 48% in April, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect.
* Expedia Group Inc. cut its full-year outlook for gross bookings and revenue after it saw weaker-than-expected domestic and inbound travel demand in the US at the start of the year.
* Lyft Inc. reported better-than-expected gross bookings in the first quarter, drawing a sharp contrast with the disappointing results issued by its much-larger ride-hailing rival Uber Technologies Inc. earlier this week.
* Pinterest Inc.’s second-quarter revenue guidance topped estimates at the midpoint, further easing concerns of an advertising slowdown.
* Coinbase Global Inc.’s first-quarter revenue jumped while profit declined as the largest US crypto exchange navigated the volatile price swings of the digital asset market.
* DraftKings Inc. rose as investors looked past a disappointing first quarter hurt by a March Madness basketball tournament that went especially well for gamblers.
* Sweetgreen Inc. cut its annual guidance, citing a sharp decline in consumer sentiment following the announcement of new tariffs in the US.
* Illumina Inc. cut its full-year adjusted profit guidance for the second time in three months as it grapples with the impact of tariffs and China banning imports of its gene-sequencing machines.
* IAG SA announced its biggest order yet for widebody jets, doubling down on long-haul demand with a $10 billion fleet investment that aims to help sustain its earnings momentum.

Some of the main moves in markets:
Stocks
* The S&P 500 was little changed as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World Index was little changed
* Bloomberg Magnificent 7 Total Return Index rose 0.4%
* The Russell 2000 Index fell 0.2%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.2% to $1.1256
* The British pound rose 0.5% to $1.3311
* The Japanese yen rose 0.4% to 145.30 per dollar
Cryptocurrencies
* Bitcoin rose 0.6% to $103,200.18
* Ether rose 6.7% to $2,332.5
Bonds
* The yield on 10-year Treasuries was little changed at 4.38%
* Germany’s 10-year yield advanced three basis points to 2.56%
* Britain’s 10-year yield advanced two basis points to 4.57%
Commodities
* West Texas Intermediate crude rose 1.7% to $60.94 a barrel
* Spot gold rose 0.7% to $3,328.68 an ounce

Have a wonderful weekend everyone.

Be magnificent!

As ever,

Carolann
Happiness is good health and a bad memory. –Ingrid Bergman, 1915-1982.

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Senior Investment Advisor

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
(C): 250.881.0801 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com