April 3, 2025, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.

April 3, 1860: Pony Express established.
April 3, 1973: The first public mobile telephone call is placed on a Manhattan sidewalk, with Motorola’s Martin Cooper calling Joel Engel of Bell Labs (a competitor) to taunt them.
April 3, 2000: A federal judge ruled that Microsoft Corp. had violated U.S. antitrust laws.
Jane Goodall, conservationist, b. 1934.
Maron Brando, actor, b. 1924.

‘Be ready to move quickly to higher ground’: Forecaster delivers ominous warning of 1-in-1,000-year flood coming for central US
Forecasters have warned of historic flooding in the central U.S. this week, anticipating multiple bouts of heavy rainfall and extreme thunderstorms. Read More

Scientists drilled into Belize’s Great Blue Hole and discovered a worrying trend
Tropical storms have been steadily increasing in frequency over the past 5,700 years, new evidence from sediment in the Great Blue Hole reveals, with a massive spike in the past two decades. Read More.

North America is ‘dripping’ down into Earth’s mantle, scientists discover
Seismic mapping of North America has revealed that an ancient slab of crust buried beneath the Midwest is causing the crust above it to “drip” and suck down rocks from across the continent. Read More.

Your brain starts eating itself during a marathon, study finds
Under extreme metabolic conditions, like a marathon, the brain may turn to cellular fat stores to maintain function, according to a new study. Read More.

Watch this humanoid robot perform a side flip for the first time
Unitree’s G1 demonstrates a new level of robotic agility with a complex movement following an AI software update. Read More.

Luxury liner ends voyage with on-board outbreak
A norovirus outbreak on the Queen Mary 2 left more than 240 people feeling sick at sea. The infected passengers and crew members had to be quarantined to avoid further spreading the highly contagious stomach bug.

Get out your wallets, gamers
Nintendo has revealed new details about the Nintendo Switch 2, the soon-to-be-released sequel to its wildly successful hybrid game console. Yes, there are lots of new features to enjoy. But, the Switch 2 is also going to cost $150 more than its predecessor.

Rare statues discovered in Pompeii tomb
Archeologists excavating a massive tomb in Pompeii said the statues they found of a toga-clad man and a woman shed new light on the power held by priestesses in the ancient city.

‘Whoop, there she is!’
Former Philadelphia Eagles center Jason Kelce and his wife, podcaster Kylie Kelce, announced the arrival of their fourth daughter on Instagram this week. Jason also introduced her to his younger brother, Travis, on the “New Heights” podcast, which they co-host, and revealed the baby’s name.

PHOTOS OF THE DAY

Lisse, Netherlands
Spring bloom at the Keukenhof flower garden
Photograph: Molly Quell/AP

Washington DC, US
People take part in the Blossom kite festival
Photograph: Bonnie Cash/UPI/Rex/Shutterstock

Gölbaşı district, Turkey
An aerial view of flamingos on a reservoir, which is home to many bird species.
Photograph: Rasit Aydogan/Anadolu/Getty Images
Market Closes for April 3^nd, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
The only thing we know about the future is that it will be different. -Peter Drucker, 1909-2005.
Canada
By Stephanie Hughes and Geoffrey Morgan
(Bloomberg) — Canadian stocks had their worst trading session since the Covid-19 pandemic after US President Donald Trump applied tariffs to most of his country’s trading partners.
Despite the tumble, Canadian equities outperformed their peers in the US.
The S&P/TSX Composite Index fell 3.8%, the most since June 2020, closing at 24,335.77.
The S&P 500 Index, meanwhile, closed down 4.8%.
Canada’s outperformance against US benchmarks Thursday was likely driven by the fact the country was spared additional Trump tariffs.
“The negative impacts of the trade wars was clearly priced into Canada more than the United States,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
“It’s really interesting that we’re not down as much as the US even though resources are getting crushed.”
Canadian equities were upgraded two notches to overweight from underweight by Scotiabank analysts including Hugo Ste- Marie, who said the country “dodged the bullet” on more US tariffs.
US equities, meanwhile, were downgraded two notches.
The TSX was weighed by information technology names like Shopify Inc. and Celestica Inc.
Lundin Gold Inc. was the index’s best performer by late afternoon Thursday, rising 2.8% to close at C$45.36.
The miner usurped Dollarama Inc., which led for most of the trading day.
The Quebec-based discount retailer rose as much as 9.3% after its adjusted earnings beat analyst estimates, sending the stock to an all-time high.
The stock later pared those gains and closed up 0.4% at C$159.95.
As for the Canadian dollar, it rose 1.1% to C$1.4087 per US dollar as of 4:52 p.m.
Toronto time, reaching its highest level since December.
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 3.8%, with nine of 11 sectors lower, led by information technology stocks.
As of market close, 158 of 218 stocks rose, while 51 fell.
Lundin Gold Inc. led the advances, rising 2.8%, while Aritzia Inc. decreased 20%.
Markets at a Glance:
* S&P/TSX Index fell 3.8% to 24,336
* Nine of 11 sectors fell
** Information technology declined, down 13%
** Communication services gained, up 2%
* S&P 500 Index fell 4.8% to 5,397
* Nasdaq 100 Index fell 5.4% to 18,521
* Crude oil fell 7% to $67/bbl
* Natgas rose 1.5% to $4.11/mmbtu
* Gold fell 1.2% to $3,102/oz
* Silver fell 8.1% to $32/oz
US
By Rita Nazareth
(Bloomberg) — The “America First” trade is unraveling in the sweeping turmoil in global markets, with stocks acutely exposed to the US economy sinking alongside the dollar.
As Wall Street’s rebellion against Donald Trump’s tariff war intensifies, traders are rushing into fixed-income havens.
About $2 trillion was erased from the S&P 500, with the gauge down about 5%.
The Russell 2000 of smaller firms extended its plunge from a 2021 all-time high to 20% on speculation the president’s trade offensive will stunt the American economy.
The greenback slid 1.5%, reigniting the debate about its haven reputation during challenging times as the euro, yen and Swiss franc surged.
Oil joined a selloff in commodities.
All in, the much-vaunted America-first trade — buying up assets that win when the US outperforms the rest of the world — is reversing on concern that the steepest increase in American tariffs in a century will hammer economic growth.
That’s driving a fierce rally in global bonds, sending the yield on benchmark Treasuries briefly below the closely-watched 4% level.
Most other yields also tumbled as money markets priced in a 50% chance of the Federal Reserve delivering four quarter- point rate reductions this year.
Trump has embraced tariffs as a tool to assert US power, revive manufacturing at home and extract geopolitical concessions. Economists say the near-term result of his measures will likely be higher US prices and slower growth, or perhaps even a recession.
“If these tariffs stick, the economy is going to slow down,” said Mary Ann Bartels at Sanctuary Wealth.
“Whether it’s a recession or not, it’s clear that the economy is headed for a slowdown in the US and around the world. There’s no place to hide, but the fixed-income markets.”
As spiraling tariff worries hammer US stocks, legendary investor Bill Gross is urging prospective dip-buyers to stay on the sidelines.
“Investors should not try to ‘catch a falling knife’,” he said in an email.
“This is an epic economic and market event similar to 1971 and the end of the gold standard except with immediate negative consequences.”
Wall Street will face a key test Friday as the jobs report and a speech by Fed Chair Jerome Powell should set the tone for markets worried about the outlook for the world’s largest economy.
Goldman Sachs Group Inc.’s trading desk has seen a level of activity on Thursday that’s practically “unheard of” apart from stock-market rebalancing days.
It’s the busiest day for the desk since the emergence of Chinese AI startup Deep Seek rattled global markets in late January, John Flood, a Goldman partner and trading specialist, wrote in a note to clients.
“Our desk is a 9.5 out of 10 in terms of activity levels and I would not be surprised to see close to 20 billion shares trade across all US equity exchanges today,” where the average this year is 15 billion, Flood wrote.
Money managers have rolled back exposures to American equities to levels not seen since November 2023, according to a poll by the National Association of Active Investment Managers.
Hedge funds dumped global stocks at the fastest rate in 12 years in March, according to Goldman Sachs Group Inc. data.
Recession fears have been rising and that is visible across various asset classes.
Stocks and bond yields are back moving in concert and their correlation is the highest in two years.
But unlike in 2023 when they were both going up, this time they’re falling, a typical sign that economic growth expectations are being downgraded.
Nomura Securities International Inc. said it expects gross domestic product to expand 0.6% in 2025 after accounting for the new levies on imports, and a key measure of underlying inflation to rise to 4.7%.
Barclays Plc economists took a more pessimistic view toward GDP — projecting a 0.1% contraction — and a slightly more optimistic view of inflation, penciling in a 3.7% increase.
“I have no doubt that over the near term tariffs will be detrimental to growth,” said Irene Tunkel at BCA Research.
“We have gone through the first stage of this calamity and, as I said before, this is bad for financial markets.
The first stage is peak uncertainty.  The next stage will be downgrades in earnings.”
The US risks being caught between slowing growth and rising prices as a result of the sweeping tariff plans unveiled Wednesday by the Trump administration, according to the president of Apollo Global Management Inc.
The chances of a recession in the world’s biggest economy have risen to 50% or higher, Jim Zelter said in a Bloomberg
Television interview Thursday.
The risk that tariffs accelerate inflation and constrain the Fed’s ability to stimulate growth by slashing rates has also risen materially, he said.
“We’re left to ponder how far the price action can extend from here. At this stage, the more relevant uncertainty is the degree to which the US equity market will sell off,” said Ian Lyngen and Vail Hartman at BMO Capital Markets.
“In the event that stocks continue to slide, we anticipate that Treasury yields will do the same.”
Trump’s trade war is likely to reinforce the underperformance of US equities, as tariffs crimp earnings for Corporate America, according to global strategists at HSBC including Alastair Pinder.
“We believe this could accelerate the ongoing rotation out of US equities and into international,” they noted.
US tariffs were larger than expected, not priced in, and coming at a bad time, increasing the risk that US stocks will enter a bear market, UBS strategists led by Bhanu Baweja said.
“All of this is likely to mean an extended period of volatility for US equities,” said Solita Marcelli at UBS Global Wealth Management. Nonetheless, we do believe the market will end the year higher.”
While uncertainty is currently high, Marcelli believes that, at the margin, incremental news flow could become more supportive as we approach the second half of the year.
“Now that the tariffs have been announced, negotiations to soften them can begin,” she said.
“Tariff revenue could be used to offset the cost of extending tax cuts. And we would expect the Fed to respond to weakening growth with interest rate cuts.”
Meantime, the dollar’s extended decline in the midst of a global selloff in risk assets has sparked a vigorous debate about whether it has retained its status as a haven during turbulent times, given the homegrown nature of the economic fears roiling macro markets.
The Bloomberg Dollar Spot Index tumbled as much as 2.1% on Thursday, the measure’s sharpest intraday decline since its
launch in 2005.
Investors are bearish on the dollar in the coming month for the first time since September, options data show.
Hedge funds have increased their bearish bets on the dollar, mainly versus the yen and the euro, while also bracing for higher volatility into year-end, according to currency traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly.
Before the Bell: Stocks and Dollar Sink, UBS Sees 5% Inflation

Some of the main moves in markets:
Stocks
* The S&P 500 fell 4.8% as of 4 p.m. New York time
* The Nasdaq 100 fell 5.4%
* The Dow Jones Industrial Average fell 4%
* The MSCI World Index fell 3.9%
* Bloomberg Magnificent 7 Total Return Index fell 6.7%
* The Russell 2000 Index fell 6.6%
Currencies
* The Bloomberg Dollar Spot Index fell 1.5%
* The euro rose 1.6% to $1.1024
* The British pound rose 0.6% to $1.3081
* The Japanese yen rose 2% to 146.24 per dollar
Cryptocurrencies
* Bitcoin fell 4.3% to $81,931.13
* Ether fell 5.1% to $1,785.72
Bonds
* The yield on 10-year Treasuries declined eight basis points to 4.05%
* Germany’s 10-year yield declined seven basis points to 2.65%
* Britain’s 10-year yield declined 12 basis points to 4.52%
Commodities
* West Texas Intermediate crude fell 6.9% to $66.74 a barrel
* Spot gold fell 0.8% to $3,107.76 an ounce

-With assistance from Vildana Hajric, Phil Kuntz, Sujata Rao,
Margaryta Kirakosian and Anand Krishnamoorthy.

Have a lovely evening.

Be magnificent!

As ever,

Carolann
Embrace the faith that every challenge surmounted by your energy; every problem solved by your wisdom; every soul stirred by your passion;
and every barrier to justice brought down by your determination will ennoble your own life, inspire others, and explode outward the boundaries of
what is achievable on this earth. –Madeleine Albright, 1937-2022.

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