The Week in Review

Weekly Market Recap: U.S. and Canada

The Jekyll and Hyde show continued this week with the markets showing real strength, rebounding from recent volatility with solid gains across the board. The Nasdaq 100 led the charge thanks to renewed enthusiasm in tech, while the S&P 500 and Dow Jones also climbed steadily. The TSX followed with modest gains, though Canadian equities slightly lagged behind their U.S. peers.

Looking at the numbers, the Nasdaq 100 rose sharply with a weekly return of 6.07%. The S&P 500 wasn’t far behind, finishing up 4.59%, the Dow Jones added 2.48% and the TSX trailed slightly, gaining 2.33%. I must say, it was the kind of week that gives investors a little room to breathe after such a tough start to April.

Major Economic Stories

What really jumped out at me this week was Friday’s Michigan Consumer Sentiment report. Sentiment slid sharply, which highlights growing concerns about future risks. All that said, though, we did see some underlying strength in retail and manufacturing.

Here’s what we learned this week.

U.S. Consumer Sentiment Drops Sharply

American consumers grew notably more pessimistic about the economy in April. (Full Report Below)

Revised sentiment data shows deepening worries about inflation, trade tensions, and future conditions.

• Sentiment index revised to 52.2 (from 50.8)

• Fourth consecutive monthly decline

• Inflation expectations hit 6.5%, highest since 1981

• Expectations index dropped to 47.3

• Read the Full Survey

Canadian Retail Sales Edge Higher

Retail sales in Canada saw a small rebound after February’s decline. 

The latest estimates suggest modest strength in consumer spending, even as several key sectors remain under pressure.

• Retail sales likely rose 0.7% in March

• February sales fell 0.4% to C$69.4B

• Motor vehicle dealers dropped 2.6%

• Core retail sales rose 0.5%

• Read the Full Release

U.S. Durable Goods Orders Spike

U.S. manufacturers posted a strong rebound in March, led by transportation. 

This was the third straight month of gains, although this report was very focused. I go into more detail in the story to follow.

• Transportation equipment rose 27%

• Orders jumped 9.2% vs. 2% forecast

• Nondefense capital goods +29.4%

• Core business orders rose just 0.1%

• Read the Full Report here.

Key Takeaways From this Week’s Economic News

Consumer Confidence Takes a Big Hit

The revised University of Michigan data shows consumer sentiment in the U.S. falling to 52.2, its lowest reading since mid-2022. Even with the slight upward revision, it’s clear that Americans are expecting tough times ahead. Inflation expectations, both short and long term, are climbing fast, mostly because of tariff fears and political chaos.

What jumps out to me is how fragile the mood has become. Year-ahead inflation expectations hit 6.5%, a level not seen since 1981. Yes that’s not a typo; 1981. Obviously, the public’s inflation fears are deeply entrenched. As history shows us, weak sentiment often foreshadows weaker spending, which could ripple through the economy over the next few quarters. It’s a major warning sign that should not be brushed aside.

Durable Goods Strength Hints at Sector-Specific Momentum

On the surface, a 9.2% surge in durable goods orders looks like a huge positive. And yes, transportation equipment, especially aircraft, carried much of that strength. But if we take a deeper look and strip away the transportation component, the numbers are absolutely flat. That tells me the economy isn’t firing on all cylinders, just a few high-powered ones.

For markets, it’s a tricky setup. Industrial stocks may continue to benefit, but overall economic momentum might not be as broad-based as the headline suggests. If you just looked at the Durable Goods headline, it would be easy to be lulled into a false sense of complacency. But if weakness spreads beyond consumer sentiment into actual spending, we could see this manufacturing momentum fade faster than expected.

Canadian Retail Rebound Is a Tentative Positive

Here at home, Canada’s retail sector offered a little good news this week, with sales likely bouncing back by 0.7% in March. It’s a welcome rebound after two tough months, but a deeper look shows most of the strength came from food and beverage stores. Core sales excluding autos and gas stations were only up 0.5%, and much like the data from the U.S., this signals cautious consumer behavior.

In my view, this suggests that while the Canadian consumer isn’t collapsing, we are definitely becoming more selective. Big-ticket spending, especially on vehicles, remains under pressure. That’s a trend worth watching.

THIS WEEK’S POLL QUESTION
(Results in Next Week’s Newsletter)

This week's lead story touches on the latest Michigan Consumer Sentiment survey, which shows a sharp drop in U.S. consumer confidence.
I’d love to hear how you're feeling closer to home — take a moment to answer this week’s TWO question! (Thought I’d throw in a bonus just to get a better sense of where we’re all at as a community.)

LAST WEEK’S POLL RESULTS

Another blowout poll this week, with the vast majority of respondents agreeing that the federal government should step in and legislate interprovincial trade. Honestly, the result surprised me; normally, the country tends to prefer a more "hands-off" approach to government intervention. I guess this just shows how serious the situation has become. Even those of us who might usually be more neutral are now holding our noses and admitting that, given the potential crisis we’re facing, we need to do whatever it takes.

Comments of the Week

Yes

“Typo - lock it in - but yes for the win!” - susanwheelerhall
Note: Thank you, Susan, for the spellcheck! 😳

“A maybe could have been added. I think there is room for both levels of government to have some form of control. For example where there is a national security interest at federal and other goods non vital services/goods at provincial level.“ - skarkez

“I live in Ottawa and beer is much cheaper in Quebec and technically it's illegal to bring it back across the river which is only one ridiculous trade barrier. Also I am a tradesman and my license is not valid in other provinces.“ - storierod

“I think the provinces as a whole should look to remove interprovincial trade barriers as it's something the federal government doesn't have direct control over. And with the possibility of a full blown tariff war, we may need to look to our neighbours as allies instead of being overly so protective of our resources.“ - kyiabelle1

“I think this is not a federal vs provincial debate, but rather a run-against-the-clock challenge. Not urgent, but required asap to redefine commercial routes in such a volatile, unpredictable market.” - dhammerenterprise

“It is ridiculous that free trade doesn't exist with the provinces already. The provinces should work together with the Feds to fix this and encourage trade provincially, thereby negating the tariffs being imposed by the US.“ - syoungconsultinginc

“If we can't work out free trade between our provinces, how can we develop free trade with the rest of the world including the US?“ - ba.webb

THE CONSUMER

U.S. Consumer Sentiment Falls to Lowest Since 2022

• Consumer sentiment index revised to 52.2 in April

• Fourth straight month of declining sentiment

• Year-ahead inflation expectations surged to 6.5%

• Long-term inflation expectations rose to 4.4%

It’s definitely not the greatest of news that consumer confidence in the U.S. is deteriorating fast, at least according to the University of Michigan’s latest survey, which shows April sentiment at just 52.2. This is slightly higher than the early April estimate, but it’s a very steep drop from 57 in March and the lowest reading since July 2022. Americans are increasingly concerned about inflation, trade disruptions, and broader economic uncertainty.

Consumers Brace for Rougher Times

The expectations component of the survey plummeted to 47.3, which reinforces the idea that people see trouble ahead. Trade policy instability and resurgent inflation fears are weighing heavily on perceptions. Short-term inflation expectations spiked to 6.5%, their highest level since the early 1980s, and this highlights fears that price pressures could become a long-term problem.

 Inflation Worries Take Center Stage

Long-run inflation expectations also edged up to 4.4%, up from 4.1% previously. The importance of this signal is that once consumers expect higher inflation long-term, it becomes harder for central banks to manage. Overall, the report paints a picture of an economy facing both emotional and financial strain, and it suggests that household spending, the backbone of the U.S. economy, could slow further in the months ahead.

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HOUSING
Fixed Mortgage Rates Are Rising in Canada

• Fixed mortgage rates are climbing again after a brief dip

• Rising U.S. bond yields are lifting Canadian equivalents

• Political volatility in the U.S. is rattling investor confidence

• Rate holds are increasingly important for borrowers

We’ve all heard about the massive wave of mortgage renewals that are just around the corner in Canada, and at just the worst moment fixed mortgage rates in Canada are trending higher again. The mix of tariff uncertainty, inflation jitters, and political interference with the U.S. Federal Reserve has spooked bond markets, pushing yields higher, and Canadian fixed mortgage rates with them.

U.S. Volatility Drives Canadian Yields

This month’s market chaos, triggered by renewed tariff threats and Fed tensions, caused a sharp selloff in U.S. Treasuries. Canadian five-year bond yields rose from 2.46% to the 2.8% range, driven by these global fears and domestic deficit pledges. And fixed mortgage rates track these yields, so Canadian lenders have been pulling back on rate discounts that were being offered just earlier this month.

What It Means for Borrowers

The lowest five-year fixed rate in Canada now sits at around 3.79%, but only applies to insured borrowers. In most areas, especially in hot housing markets, the best rate is now over 4%. That psychological threshold matters, as it affects not just affordability but also buyer psychology. The best advice? Secure a rate hold. With rate movements so unpredictable, locking something in for 120 days could save thousands, and you’re not committing to anything, so why not?

Read the full story here.

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AUTOMOBILE SECTOR

U.S. Auto Industry Fights Tariff Threat

• U.S. auto industry leaders urge Trump to halt tariffs

• Proposed parts tariffs threaten supply chains and jobs

• Costs could spike car prices by $2,500–$12,000

• Industry warns of “production stoppages and bankruptcies”

The U.S. auto sector is pushing back hard against President Trump’s looming auto parts tariffs, warning they could wreak havoc on North American supply chains. In a rare display of unity, automakers, parts suppliers, and dealerships issued a joint letter urging the administration to walk back the policy before it triggers layoffs and massive price hikes.

Industry Fears Supply Chain Chaos

The letter, signed by six major industry groups, described a scenario of collapsed supplier networks and halted assembly lines. The group warns of dire consequences if the current policies are left in place.

Ripple Effects for Consumers

Estimates peg the first-year cost to U.S. consumers at $30 billion. Trucks like the Ford Bronco Sport could jump $8,500 in price, while imported luxury cars may rise over $20,000. Some automakers have hinted at reshoring production, but the cost and time involved make that unlikely. The clock is ticking ahead of the May 3 deadline, and the stakes are rising by the day.

Read the Full Story here.

GLOBAL TRADE

Global Investors Losing Faith in U.S. Economy

• Dollar, stocks, and bonds all fell at once—rare and alarming

• Trump’s Fed interference and tariff flip-flops spook markets

• Analysts warn of long-term damage to U.S. global standing

• U.S. dollar reserve status faces slow but real erosion

It’s like we’re watching a slow-motion train wreck right before our very eyes. More and more signs are showing that the world’s confidence in the U.S. economy is showing visible cracks. In an unusual trifecta, U.S. equities, the dollar, and government bonds have all sold off in tandem. Analysts blame this on a loss of trust sparked by erratic policy, a politicized Fed, and record-setting tariffs.

Investor Confidence Is Faltering

University of California Berkeley economist Barry Eichengreen didn’t mince words, calling the situation a “collapse in faith.”

And the fear isn’t just about economics—it’s reputational. Citadel’s CEO Ken Griffin added that America’s brand is eroding on the global stage. As trust fades, investors are hesitant to buy U.S. bonds, long considered the ultimate safe haven.

Reserve Currency Status at Risk?

In perhaps one of the biggest parts of this story, the U.S. dollar still dominates global reserves, but its share has been slipping—about 0.5% per year. Eichengreen warned that political dysfunction could accelerate that trend. While there’s no clear alternative yet, the narrative is shifting, and if this trend continues, it could undermine the U.S.’s ability to finance itself cheaply and maintain its role as the economic anchor of the world. The only thing left to see is whether the train actually leaves the tracks, or whether a full crash can be avoided.

Read the Full Story Here.

OTHER NEWS FROM THE PAST WEEK

Canadian ETFs See Record Inflows in March
Canadian ETFs saw record-breaking inflows in March, driven by defensive positioning and growing interest in fixed income. It’s a sign investors are cautiously rotating amid market volatility.

Lawyer Pushes to Save Historic Hudson’s Bay Memorials
A Toronto lawyer is working to preserve war memorials embedded in old Hudson’s Bay stores. The concern is that upcoming store closures could erase these important tributes to veterans and history.

California Passes Japan in Economic Size
California’s economy has officially surpassed Japan, becoming the fourth largest in the world at $4.10 trillion. Governor Newsom celebrated the milestone but warned that Trump's tariffs could threaten future growth.

Trump's Mixed Messages Jolt Inflation Outlook
U.S. inflation expectations are rattled again as President Trump’s attacks on the Fed and sudden tariff changes feed market uncertainty. Analysts warn these moves could stoke long-term price instability.

Fewer Canadians Want to Work in U.S.
A new survey shows fewer Canadians are willing to move south for work as Trump-era tariffs and political instability cloud the U.S. career appeal. Cross-border talent flow could slow further.

Global Fund Managers Grow Bearish
A global survey of fund managers finds bearish sentiment rising, with most expecting lower equity returns and persistent inflation. Many are rotating into cash and bonds amid uncertainty.

Mysterious Texts Surge as Scams Rise
Strange texts from unknown numbers are flooding phones, tied to a new wave of scam campaigns. Consumer watchdogs warn that phishing and identity theft risks are sharply increasing.

Tesla's Brand Plunges to New Lows
Tesla’s brand image has hit rock bottom in a new survey, falling behind legacy automakers. Rising recalls, quality issues, and CEO controversies appear to be souring public perception.

Back in 2019, the National Bank of Canada found itself in a bit of a digital pickle. While their website sternly warned customers, "Never tell anyone your password," their new online sign-up process was asking just that—full login credentials for accounts at other banks. Privacy experts were not amused, and the bank had to backpedal quickly. It was a classic case of a well-meaning tech shortcut turning into a PR headache. Who knew that trying to make banking more convenient could get so awkward?

Market Movers

S&P 500 Returns | Week At-a-Glance

TSX Returns | Week At-a-Glance

Top 10 Weekly Gainers

Top 10 Weekly Losers

10 Most Overbought Stocks

10 Most Oversold Stocks

The Relative Strength Indicator (RSI) can provide a signal that suggest a stock is either overbought or oversold.
📈A stock that has an RSI over 70 is considered to be in “overbought” territory. This might suggest that the stock is due for a pullback, however it is not a recommendation to sell.
📉A stock that is trading with an RSI below 30 is considered to be in “oversold” territory. This might suggest that the stock is due for a recovery, however it is not a recommendation to buy. Always perform your own due diligence.

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