If you're wondering why technology, communication services and financials all had a fantastic run at the end of 2024, just look at the Q4 earnings growth numbers that were released. Financial companies grew their earnings by an average 29% in the fourth quarter. Communications services [Meta, Alphabet, Netflix] grew their earnings 32% and technology grew at 17.7%.

With all of the uncertainty created by the new administration's sporadic policies, we've had many phone calls from clients uncertain about the markets. There is no doubt that the new administration is going to create more volatility going forward. However, 60% of the companies have reported their 2024 fourth quarter results and on average they have grown their earnings by 14.8%. These are spectacular numbers. Sometimes we get so focused on the small things that we lose sight of the big picture.

As you can see from the chart below, earnings in most sectors are growing substantially and appear to be accelerating. This is very good for the stock market. For those worried about the tariffs, the Canadian election, and the Canadian economy, I suggest you bring it back to investing basics; Make sure your portfolio is well diversified with Canadian, US, and international investments along with the proper amount of bonds based on your risk tolerance and age. Overweight companies in sectors that are growing their earnings and underweight the others. It doesn't have to be complicated!

Source: Mackenzie Weekly Market Snapshot, Feb 10, 2025

I have also included a note from our CIBC Economics team entitled “The surplus the US runs with Canada”

As always, if you have any questions, please feel free to give us a call.

Have a great weekend.

Milan