May 23rd, 2025, Newsletter

Dear Friends,

Tangents: Happy Friday.

May 23, 1784: Benjamin Franklin announces his invention of bifocals, enabling clear vision for both near and far distances.
May 23, 1873 Canada’s North West Mounted Police force was established. Go to article

May 23, 1895: NY Public Library founded.
Joan Collins, actress, b.1933.
Drew Carey, actor, b. 1961.

Prince William debuts new docuseries 
The six-part series offers a rare insight into “one of the most dangerous jobs on the planet.”

Time to break out the popcorn
Summer movie season kicks off this weekend. Here are 21 films you might want to check out.

‘Super-vision’ contact lenses let wearers see in the dark — even with their eyes closed
Researchers have developed new contact lenses that enable vision in the near-infrared range, and they could restore color perception to people with color blindness. Read More.

2,300-year-old gold ring found in Israel was likely buried by a betrothed girl
A gold ring with a red gemstone found in Israel dates to the Hellenistic period and may have been buried in a coming-of-age ritual. Read More.

‘Strange’ star pulses detected in search for extraterrestrial intelligence
A retired researcher has detected an unusual pulse in the light of nearby stars while looking for signs of extraterrestrial intelligence. Aliens are one possible explanation for the strange signal, but as with every other unexplained space phenomenon, it’s probably not aliens. Read More.

A dozen black holes may be ‘wandering’ through our galaxy — and they’re the rarest type in the universe
Dozens of ‘wandering’ black holes could be tumbling through our galaxy right now, new simulations hint. Their existence could help solve a longstanding cosmic puzzle. Read More.

An udderly confused cow found itself way up in the air over Switzerland, immortalized in this photo.

The mascot for a new Northwest soccer team got roasted by Stephen Colbert. “Not only is he horrifying, he’s wearing his own children as hair!” Colbert exclaimed.

Sometimes, all people need is someone to listen. A man with a sign and a Subaru set out to be that someone for people scattered across hundreds of miles, at no charge. What he’s discovered: “Life is not all sorrow and challenges. It’s actually pretty beautiful some of the time.” This story will make you think (and perhaps tear up). 

PHOTOS OF THE DAY

Sydney, Australia
Fireworks explode as the sails of the Sydney Opera House are illuminated at the start of the annual Vivid Sydney festival
Photograph: Ayush Kumar/AFP/Getty

Chelsea flower show 2025
photograph: Sarah Lee

Taicang, China
Containers stacked at a port in Jiangsu province
Photograph: AFP/Getty Images
Market Closes for May 23^rd, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
In the business world, the rearview mirror is always clearer than the windshield. -Warren Buffett, b. 1930.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.1%, or 25.94 to 25,879.95 in Toronto.
Cameco Corp. contributed the most to the index gain, increasing 10.0%.
Energy Fuels Inc/Canada had the largest increase, rising 18.1%.
Today, 129 of 217 shares rose, while 79 fell; 5 of 11 sectors were higher, led by energy stocks.

Insights
* This month, the index rose 4.2%
* So far this week, the index fell 0.4%, heading for the biggest decline since the week ended April 4
* The index advanced 17% in the past 52 weeks. The MSCI AC Americas Index gained 11% in the same period
* The S&P/TSX Composite is 0.9% below its 52-week high on May 20, 2025, and 20.6% above its low on June 17, 2024
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.9 on a trailing basis and 15.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.8% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.17t
* 30-day price volatility fell to 10.33% compared with 14.61% in the previous session and the average of 27.35% over the past month

Index Points
Energy | 50.4992| 1.2| 34/5
Materials | 44.6240| 1.3| 40/9
Consumer Staples | 7.2257| 0.7| 9/1
Utilities | 3.4040| 0.3| 10/4
Health Care | 0.3265| 0.5| 2/2
Real Estate | -1.0619| -0.2| 8/9
Consumer Discretionary | -2.2185| -0.3| 2/7
Communication Services | -2.9374| -0.5| 0/4
Financials | -6.1746| -0.1| 13/11
Industrials | -23.3138| -0.7| 9/19
Information Technology | -44.4308| -1.8| 2/8
Cameco | 22.4500| 10.0| 194.8| 9.0
Enbridge | 9.1720| 1.0| -46.1| 3.7
Agnico Eagle Mines Ltd | 8.9260| 1.6| -14.6| 43.6
Canadian Pacific Kansas | -9.7590| -1.3| -23.6| 5.7
Canadian National | -11.9500| -2.1| -3.5| -1.2
Shopify | -31.3800| -2.6| -19.7| -8.8
The Toronto Stock Exchange has now been down just one session in the last 13 after the resources heavy index rose again on Friday, buoyed by higher commodity prices, but even as Rosenberg Research remains underweight on the Energy sector and while investors are unsure of what to expect from the Bank of Canada when it meets again on June 4.
The S&P/TSX Composite Index rose modest 25.9 points to close at 25,879.95.
Dow Jones Market Data, FactSet noted going in to today the index was up 4.08% month to date, and 4.55% year to date.
Sectors were mixed, with Base Metals the only one rising by more than 1% and Information Technology the sole one falling by more than 1%.
Of commodities, gold was sharply higher late afternoon Friday as the dollar plunged after U.S. President Donald Trump threatened to impose 50% tariffs on imports from the European Union on June 1, adding yet more turmoil for the global economy and raising safe-haven demand.
Gold for August delivery was last seen up $63.50 to US$3,387.10 per ounce, pressing close to the April 21 record high of $3,425.30.
Also, West Texas Intermediate crude oil rose for the first time in four days despite concerns over rising supply as the high-demand summer driving season begins this weekend with the U.S. Memorial Day holiday.
WTI oil for July delivery closed up $0.33 to settle at US$61.53 per barrel, while July Brent crude was last seen up $0.30 to US$64.74.
Still, Rosenberg Research in an Energy Sector Outlook entitled ‘Oil’s Not Well’ said it remains underweight on the sector: “the macro-outlook looks bad, and the risk-reward profile is constrained by mediocre fundamentals.”
Rosenberg said the “rapid” decline in oil prices shows little sign of abating given the terrible macro-outlook and OPEC+ supply pressure.
It added this leads to little upside for the Energy sector, and its models do not have a favorable view.
“The risk-reward profile and fundamentals are mediocre, but we do highlight a few brighter spots at the subsector level”.
Rosenberg Research said prospects for the U.S. Energy sector “look tactically bleak”, with oil and natural gas prices depressed and showing little upside over the next six months.
It added trade wars have reduced the outlook for manufacturing production, exports, and container shipping volumes around the world.
It remains underweight Energy, given both a problematic macro-outlook and the weak risk-reward profile.
In conclusion, the research said: “We’ve been advising investors to trim risk away from highly cyclically exposed sectors like Consumer Discretionary, and the current market valuation represents a great exit point for that purpose.
However, the Energy sector isn’t a promising destination for capital— the falling global growth outlook and low oil and natural gas prices leave little opportunity on the table, so we remain underweight.”
Meanwhile, founder David Rosenberg, in a separate note of his own said today’s Canadian retail sales number was “broadly mixed”, but added the Bank of Canada “should find comfort” in the back-to-back dips in the price deflator.
Rosenberg noted the headline came in “a tad above” expectations, up 0.8% month over month,(consensus was a rise of 0.7%).
What was key was the “woeful” -0.7% plunge in the ex-auto segment.
That was the steepest slide since May of last year, he added.
Rosenberg said even though much of that weakness reflected a price induced 6.5% MoM drop in gasoline prices, even after stripping out this and autos, retail sales still only managed to eke out a gain of less than 0.2% on the month.
He added: “Bad for the Canadian dollar but good for the GoC bond market, and all of a sudden, the Bank of Canada is back in play.
In fact, what stood out in the report was the -0.1% MoM reading in the retail price deflator for the second month in a row, and in conjunction with the deflated producer price data we got for April, tells us that the hot CPI number — which was mostly food — was actually more lukewarm than it seemed on the surface.”
Rosenberg noted the year over year trend in pricing power in the broad retail sector has slowed from +2.5% in January to +2.3% in February and now to +2.2% as of March.
“That should be fodder for the BoC policy doves and GoC bond bulls alike,” he said.
Avery Shenfeld, chief economist at CIBC Capital Markets in his regular ‘The Week Ahead’ column noted core inflation measures in Canada would suggest the BoC should be holding steady on rates in June, with April ex-energy measures coming in on the high side.
Shenfeld said that may well be the BoC decision in two weeks, but he added it would be based on what the data is showing now.
“In terms of where it’s headed,” he added, “the coming week’s GDP news will shed much lighter, given the weight that the central bank rightly assigns to economic slack, the so-called “output gap,” in steering turns in inflation.”
Taylor Schleich, Director, Economics and Strategy at National Bank Financial, for his part noted that despite Canada’s weaker growth outlook, poorer job market prospects and better contained inflation, 2025 policy rate expectations have evolved similarly here compared to the United States.
As it stands, overnight index swap markets are priced for 50 bps of Fed easing this year while just over one BoC cut is discounted.
Schleich noted consensus expects 50 bps from both.
He said: “Relative to market pricing, we think risks are skewed in the opposite direction.
To us, the BoC is likely to deliver more easing than is priced (and more than consensus).
Fed pricing is closer to ‘fair value’ but listening to the FOMC, there’s a clearer path to one (or no) cuts versus more than two.”
US
By Rita Nazareth
(Bloomberg) — Wall Street was rattled by President Donald Trump’s threats to impose aggressive tariffs on the European Union and Apple Inc., with stocks falling and the dollar hitting its lowest level since December 2023.
The S&P 500 extended losses as Trump said he’s “not looking for a deal” with the EU, reiterating tariffs would be set at 50%.
Earlier Friday, the market got some relief as Treasury Secretary Scott Bessent said the US could strike “several large” trade deals in the next couple of weeks.
Apple fell 3%, down for an eighth straight session.
United States Steel Corp. soared 21% as Trump backed a partnership with Japan’s Nippon Steel Corp. Benchmark 10-year Treasuries held gains as Bessent said regulators may ease a capital rule on the market, which could reduce yields.
Haven currencies like the Japanese yen and the Swiss franc climbed alongside gold.
Trump said that the 25% tariff he threatened against Apple earlier Friday would also be aimed at device makers including Samsung Electronics Co. to spur them into moving manufacturing of their products to the US.
The president said in a social media post that the higher charge on the EU would start on June 1 because “our discussions with them are going nowhere.”
The sudden move underscores the ongoing risk that shifts in US policy can abruptly upend market dynamics at short notice.
Markets had rebounded in recent weeks on optimism that Trump was softening his approach to the tariffs and investor attention had turned to concerns about the ballooning US debt and deficits.
“Volatility remains the theme,” said Louis Navellier, chief investment officer at Navellier & Associates.
“This is a sharp reminder that the tariffs will continue to be a source of major uncertainty until there are meaningful agreements finalized.”
That said, Navellier says these threats are negotiating tactics to give President Trump negotiating leverage, so he would be “shocked” if these proposed tariffs are imposed.
The S&P 500 dropped 0.7%, down for a fourth straight day.
The Nasdaq 100 slid 0.9%.
The Dow Jones Industrial Average fell 0.6%.
The Stoxx Europe 600 Index lost 0.9%, with tariff-exposed autos among the biggest decliners.
The yield on 10-year Treasuries declined two basis points to 4.51%.
The Bloomberg Dollar Spot Index fell 0.8%.
“Just when I thought it was safe to go back into markets, look what happens,” said Neil Birrell, chief investment officer at Premier Miton Investors.
“Uncertainty is continually ramping up — it’s not about to come down at all.
This is on trend in terms of Trump’s tactics of imposing tariffs,” he added.
The president’s tariff threats represented a fresh round of trade brinkmanship; after indicating last week he was looking to wind down talks with partners over his April 2 duties, which he paused for 90 days to allow for negotiations.
“It’s going to keep markets on edge,” said Aneeka Gupta, head of macroeconomic research at Wisdom Tree UK Ltd.
“Markets were hoping news on tariffs had abated until at least the 90-day pause expired, but that’s clearly not the case.
Uncertainties are here to stay.
We’re in for a period of very high volatility.”
To Capital Economics, Trump’s threat of a 50% tariff on the EU from June may well turn out to be a “negotiating tactic” and seems “very unlikely” to be where tariffs settle over the long run.
“At this stage, we are not inclined to change our working assumption that tariffs on the EU will ultimately settle around 10% but this underlines that there are risks and that the road to an agreement could be rocky,” the firm said.
Eric Teal at Comerica Wealth Management said that the EU implications would be less impactful than many of the Asian emerging markets that are key components to the technology sector supply chain.
“Although policy uncertainty injects more investment uncertainty, we believe this is part of the negotiating thesis to cut individual or regional deals, and we still believe that most companies and the economy are well positioned to power through the temporary higher import prices,” he said.
The Trump administration’s fast-changing tariff policies have sent equities spiraling on recession fears and concerns about the safety of US assets, but they’ve rebounded from April’s lows as the president touted progress in tariff negotiations.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon recently warned against complacency in the face of a slew of risks, citing everything from inflation and credit spreads to geopolitics.
“Concerns over trade, fiscal deficits, and growth may be less evident in equity markets when considering the broader market’s impressive recovery from the April lows, but they still appear to be relevant to the dollar,” said Adam Turnquist at LPL Financial.
Turnquist noted the greenback has struggled to gain traction over the last month as de-dollarization trends continue against a backdrop of rising deficit forecasts and a US debt downgrade.
The latest tariff threats came at a time when bond investors are demanding more compensation to hold long-dated US debt as global markets grow anxious about the widening fiscal deficit in the world’s biggest economy.
The US 10-year term premium — or the extra return investors demand to own longer-term debt instead of a series of shorter ones — has climbed to near 1%, a level last seen in 2014.
It’s a measure of how jittery investors are about plans to raise the scale of future borrowing.
“While there is a risk that deficit fears lead to progressively higher yields in the weeks ahead, we believe that the Fed and/or Trump administration would likely make adjustments in the event of much higher yields,” said Solita Marcelli at UBS Global Wealth Management.
To Marcelli, that means high grade and investment grade bonds represent good value at current levels for investors seeking portfolio income.

Corporate Highlights:
* Oracle Corp. will spend around $40 billion on Nvidia Corp.’s high-performance computer chips to power OpenAI’s new US data center in Abilene, Texas,, the Financial Times reported, citing several people familiar with the matter.
* Trump on Friday signed orders meant to accelerate the construction of nuclear power plants, including small, untested designs that offer the promise of rapid deployment but have yet to be built in the US.
* Boeing Co. has reached a tentative agreement with the US Justice Department that would allow the plane maker to avoid criminal charges for two fatal crashes of its 737 Max jets more than six years ago.
* Salesforce Inc. is in talks to acquire software company Informatica Inc., rebooting a pursuit that fell through last year, people familiar with the matter said.
* CommScope Holding Co. is exploring a sale of its broadband connectivity and cable arm, according to people with knowledge of the matter, as the network infrastructure firm unloads assets to repay debt.
* Visa Inc. and Mastercard Inc. fees are under fresh scrutiny from European Union antitrust enforcers, less than a decade after a series of probes ended with hefty fines and an agreement to cut some of their controversial levies.

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.7% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.9%
* The Dow Jones Industrial Average fell 0.6%
* The MSCI World Index fell 0.4%
* Bloomberg Magnificent 7 Total Return Index fell 1.3%
* The Russell 2000 Index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index fell 0.8%
* The euro rose 0.7% to $1.1363
* The British pound rose 0.9% to $1.3535
* The Japanese yen rose 1% to 142.51 per dollar
Cryptocurrencies
* Bitcoin fell 2.1% to $108,725.93
* Ether fell 3.1% to $2,559.67
Bonds
* The yield on 10-year Treasuries declined two basis points to 4.51%
* Germany’s 10-year yield declined eight basis points to 2.57%
* Britain’s 10-year yield declined seven basis points to 4.68%
Commodities
* West Texas Intermediate crude rose 0.7% to $61.61 a barrel
* Spot gold rose 2% to $3,361.06 an ounce

-With assistance from Sagarika Jaisinghani, Julien Ponthus, Andre Janse van Vuuren and Lynn Thomasson.

Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
The best time to plant a tree was 20 years ago. The second-best time is now.— Chinese Proverb
 
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
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www.carolannsteinhoff.com