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Address 500 Centre Street SE 27th Floor Calgary AB, T2G 1A6
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Milan Cacic

June 13, 2025

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LIKE IT OR NOT, THE UNITED STATES IS STILL A GOOD PLACE TO INVEST

Over the past few weeks, we've had some clients ask if we still have exposure to the U.S. in our models. Other clients have suggested that we pull all of our money from the U.S. because of Donald Trump's actions. Emotionally, this may feel good, but the data tells us this would be a mistake. Now, I want to be clear that we have lowered our exposure to the U.S. not because of President Trump's actions, but because the Canadian Dollar is starting to strengthen. Divesting entirely from the United States is almost always a mistake.

 

For those considering selling all of their U.S. investments, I suggest you look at the chart below first. The below chart is a plot of different countries and their economic performance in both the manufacturing (x-axis) and service (y-axis) sectors. The top right quadrant indicates expansion of both manufacturing and services, whereas the bottom left signifies the opposite, contraction in both. Unfortunately, Canada’s position (CAN) shows contraction in both sectors, with a manufacturing PMI of 46.1 and a services PMI of 45.6. This is the weakest position on the chart; a stark contrast to other nations, such as the United States (USA) and India (IND) in the top right quadrant. This data underscores our lack of growth over the last 10 years and the negative impact of tariff uncertainty on Canada's industrial and economic activities.

A grid chart with G7 and other countries plotted by their Services PMI (y-axis) and their Manufacturing PMI (x-axis). Top right of the grid indicated expansion in both sectors (greater than 50), bottom left indicates contraction in both (less than 50).

Now, not all is lost – there are some glimmers of hope. Both Prime Minister Mark Carney and Minister of Energy and Natural Resources, Tim Hodgins, have verbally stated they’re open to more natural resource development. I believe this is one of the reasons the Canadian Dollar has been going up over the last month. If Canada can build some large infrastructure projects, maybe we can reverse this trend. We should find out within the next six months if that is the case. In the meantime, I would think twice before selling all of your U.S. investments!

 

I have also attached some commentary from our CIBC Economics team entitled “The price of progress”.

 

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

 

Have a great weekend.

Milan

 

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CIBC Private Wealth” consists of services provided by CIBC and certain of its subsidiaries through CIBC Private Banking; CIBC Private Investment Counsel, a division of CIBC Asset Management Inc. (“CAM”); CIBC Trust Corporation; and CIBC Wood Gundy, a division of CIBC World Markets Inc. (“WMI”). CIBC Private Banking provides solutions from CIBC Investor Services Inc. (“ISI”), CAM and credit products. CIBC Private Wealth services are available to qualified individuals. Insurance services are only available through CIBC Wood Gundy Financial Services Inc. In Quebec, insurance services are only available through CIBC Wood Gundy Financial Services (Quebec) Inc.


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