As the old year counted down to the new, we anticipated the first few months of 2025 would be a little turbulent. After winning the U.S.’s presidential election in November, President Donald Trump vowed to slap heavy tariffs on Canada, as well as Mexico and China, early into his presidency. Although he didn’t quite fulfill that promise on “day one” as he’d stated after the election, the very announcement was enough to make us, and the markets, justifiably nervous.
And that was before the roller-coaster even began.
We saw the effect in the markets as Trump took office in late January. The month’s last day saw the S&P/TSX composite dip 1.1%, though gains earlier in the month left us with total gain of 3.3% for January.1 Tariffs were promised to go into effect in February, but a last-minute deal between leadership gave us, and Mexico, a month-long reprieve.2 By the next week, though, Trump had threatened other tariffs on aluminum and steel imports, leaving the markets teetering.3 February’s low spot came a week after that, with a loss of 1.4% in the wake of a new report from Statistics Canada showing a drop in consumer spending.4 Fortunately, the stock market tends to be resilient, and we ended the month with a modest recovery.5
That recovery didn’t last into March, which brought more trouble with the markets—along with those darn tariffs. When they hit on March 4, the stocks responded by slumping on both sides of the border.6 That dip turned into a downward trend that hit a low on March 13, when it reached a point we haven’t seen since last October.7 They rallied a little over the next couple of weeks, and we ultimately finished out the month, and quarter, with a slight increase in both the S&P (up .55%) and TSX (up .6%). The month overall saw a loss of 1.9% in the TSX, though quarter-wise, we’re in a slightly better position than we were when it started in January.8
All in all, a tumultuous quarter. A few things to keep in mind, though. First, looking at a quarter as a whole gives us more information than looking at the market performance over a day or a week or even a month, but it’s still a fairly short window of time. It’s tempting to draw conclusions about what lies ahead, but it’s usually best to cautiously wait and see what the continuing trends look like before forecasting doom and gloom—or profit and success. Second, it's a well-known fact that markets hate uncertainty, and that includes change. Well, we’ve had plenty of change and uncertainty lately. We’ve likely got a few more to come, too. However, as those changes settle down, there’s a good chance the uncertainty will fade, giving investors more confidence. Finally, markets do tend to self correct, even from scary-looking tumbles. Even a global calamity like the COVID-19 pandemic leveled out in a few years, which isn’t very long at all in the scheme of things.
So let’s keep looking forward and see how things shape up, and we’ll react as we get more information. If there are any accounts or sectors you’ve got particular interest or concern in, don’t hesitate to give us a call in the meantime.
Have a great month!
Sincerely,
The Omell Financial Group
1 “TSX pares monthly gain as investors gird for US trade tariffs,” Reuters, 31 January 2025, https://www.reuters.com/markets/tsx-futures-little-changed-us-tariffs-looms-2025-01-31/.
2 “Trump agrees to pause tariffs on Canadia and Mexico after they pledge to boost border enforcement,” Associated Press, 3 February 2025, https://apnews.com/article/trump-tariffs-canada-mexico-china-sheinbaum-trudeau-017efa8c3343b8d2a9444f7e65356ae9.
3 “@ the Bell: TSX falters as tariff threats sink in,” Stockhouse, 11 February 2025, https://stockhouse.com/news/market-updates/2025/02/11/-bell-tsx-falters-as-tariff-threats-sink.
4 “Market Analysis: February 21st, 2025,” The Globe and Mail, 21 February 2025, https://www.theglobeandmail.com/investing/markets/stocks/BA-N/pressreleases/31056730/market-analysis-february-21st-2025/.
5 “TSX recoups much of February decline as financials rally,” Reuters, 28 February 2025, https://www.reuters.com/markets/tsx-futures-inch-lower-markets-await-key-economic-data-2025-02-28/.
6 “@ the Bell: Stocks falter as American tariffs finally arrive,” Stackhouse, 4 March 2025, https://stockhouse.com/news/market-updates/2025/03/04/-bell-stocks-falter-as-american-tariffs-finally-arrive.
7 “TSX hits 4-1/2-month low on trade war jitters,” Reuters, 13 March 2025, https://www.reuters.com/markets/tsx-futures-slip-amid-escalating-global-trade-tensions-2025-03-13/.
8 “S&P 500 posts worst performance since 2022 – but TSX stays out of the red,” The Globe and Mail, 31 March 2025, https://www.theglobeandmail.com/investing/markets/inside-the-market/market-news/article-premarket-global-stocks-fall-sharply-as-tariffs-stoke-recession-fears/
Sourced from Bill Good Letters Library
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