New “Second Act” Retirement Video is Live!

For those following my “Second Act” YouTube series, where I explore all aspects of retirement in Canada, Episode 5 is now live! This installment dives into a topic that becomes increasingly important as we age: health. From rising medical costs to unexpected expenses, this episode takes a closer look at the financial realities of managing your well-being in retirement, and why it’s often more costly than people anticipate.

The Week in Review

Weekly Market Recap: U.S. and Canada

Nice to see a strong week for equities, with all major North American indices ending in positive territory. The markets started the week with momentum and hit some mid-week bumps, but did stabilize and finished on solid ground.

Looking at the numbers, the TSX led the group with a 1.28% gain. The S&P 500 followed closely, rising 1.19%, the Nasdaq 100 climbed 1.08%, and the Dow Jones trailed with a 0.98% increase. A relatively consistent, broad-based climb overall, with no major drama in either direction. (At least in comparison to recent volatility. 😳)

Major Economic Stories

Recap of the Week

Canadian GDP surprised to the upside this week, but U.S. data painted a more cautious picture with slowing consumption.

Here are what the numbers told us this week.

Canada’s GDP Beats Expectations

Canada’s economy expanded faster than expected in Q1, driven by exports.

Growth came in at 2.2% on an annualized basis, beating the 1.7% forecast. The strength came from businesses stockpiling ahead of U.S. tariffs, while domestic demand showed signs of fatigue.

• GDP rose 2.2% vs. 1.7% forecast

• Driven by exports and inventory build-up

• Domestic demand stagnated

• March GDP up 0.1%

• Full Release Here

U.S. Factory Orders Drop Sharply in April

Manufacturing orders in the U.S. fell 6.3% last month, the steepest decline since January 2024.

Tariff uncertainty and weak transportation demand weighed heavily, and commercial airline orders collapsed as firms paused new aircraft purchases.

• Orders fell 6.3% MoM

• Transportation orders dropped 17.1%

• Non-defense aircraft orders plunged 51.5%

• Capital goods orders down 14.6%

• Read the Full Release

U.S. Core PCE Inflation Slows

The Fed’s preferred inflation gauge slowed in April, rising just 0.1% month-over-month.

Annual inflation came in at 2.5%, the lowest since March 2021. Markets took the data as confirmation of moderating price pressures. March sales revised to +0.8%

• Monthly core PCE rose 0.1%

• Year-over-year increase was 2.5%

• Slowest annual pace in 3 years

• Met market expectations

• Read the Full Report here.

U.S. Personal Income Up in April

Personal income in the U.S. rose 0.8% in April, outpacing forecasts.

The jump was driven by a sharp rise in transfer payments and stable wage growth. However, asset income slipped, and rental income stalled.

• Income rose 0.8% MoM

• Transfer receipts jumped 2.8%

• Wages and supplements rose 0.5%

• Asset income fell 0.4%

• Full Report here

Spending Cools After Pre-Tariff Rush

Consumer spending in the U.S. rose 0.2% in April, easing from March.

The slowdown followed a bump in spending before tariff hikes kicked in. Services spending held up, but goods demand weakened.

• Spending rose 0.2% MoM

• Goods spending fell 0.1%

• Services spending increased 0.4%

• Durable goods demand declined

• Read the Report here.

Key Takeaways From this Week’s Economic News

Canada’s GDP: Strong, but Misleading?

At first glance, Canada’s Q1 GDP growth of 2.2% looks like a win. It beat expectations and showed resilience, especially given the headwinds from rising tariffs and sluggish domestic demand. But when you dig into the data, it’s clear this isn’t a broad-based recovery, rather more of a temporary export-driven bump. Companies front-loaded exports and inventories to avoid Trump’s tariffs, so the headline number likely overstates the underlying strength.

What’s more important is what didn’t grow. Household consumption was weak, and final domestic demand didn’t rise for the first time since late 2023. This all points to stress under the surface. As we approach the Bank of Canada’s rate decision this coming Wednesday, this report complicates the picture. If you just look at the top-line number, it says “hold,” but the details may still argue for a cut if domestic conditions don’t improve.

Tariffs Disrupt U.S. Manufacturing Momentum

U.S. factory orders fell off a cliff in April, down 6.3%, a pure reflection of the chaos brought on by the reciprocal tariff fiasco. Aerospace was hit hardest, especially commercial aircraft which saw a staggering 51.5% drop in orders. Companies that rushed to place orders in March stayed on the sidelines in April, and that created a massive whiplash.

We’re seeing more businesses hesitate as they try to figure out this current unstable policy environment. If Trump’s trade strategy continues to create this kind of volatility, it could undercut industrial production just as hiring and investment were beginning to stabilize.

Core Inflation Softens, But Not Enough for Cuts

The 0.1% monthly rise in the core PCE index is a welcome deceleration, and the 2.5% annual increase marks the lowest since early 2021. But, similar to Canada’s GDP numbers, this is a case of “good, not great.” Inflation is heading in the right direction, but it’s not exactly plunging. The Fed will likely see this as validation for staying on hold in June rather than moving toward cuts.

The key issue now is timing. Markets might be hopeful that softening inflation means easing is around the corner, but if we see income rise and consumption drop, then price pressures could reemerge. The Fed is caught between a rock and a hard place. Wait too long and it risks a slowdown; move too soon and inflation could reignite.

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

We all see the headlines and feel the impact of everyday life, but which one shapes your outlook more? This week’s poll asks: When it comes to understanding the economy, do you put more trust in the official reports and data, or in your own lived experience? Are economic indicators guiding your perspective, or does your day-to-day reality tell a different story? I’m really looking forward to reading your responses.

LAST WEEK’S POLL RESULTS

Last week I asked whether you felt companies were justified in passing increased tariff costs along to customer, and as you can see, the results were overwhelming. On this question, I agree. I know that many companies try to absorb what they can, but at the end of the day, especially for smaller companies, it’s literally a question of survival.

Reader Comments

Yes, It’s Unavoidable

"Additional costs are almost always passed through to the customer and tariffs should be treated the same IMO. With that said, IF retailers use tariffs as an excuse to increase prices resulting in margins beyond pre-tariff levels., those companies should be called out and they should lose the trust of their customers. Retailers should tread carefully, as it takes years if not generations to gain trust, but it can be lost in a heartbeat." — callawayguy

"Companies can trim their margins but to operate without have to shut the doors or impose layoffs they still need to be profitable to maintain and hopefully grow." — ddamude

"It is almost a never-ending spiral, cost of goods go up, consumers need to gain more income to afford the living, companies have to up their prices again and so on...." — aelaan

"We are in this together & we all must absorb some of the cost. Except if you are US stores operating in Canada you must absorb it Walmart, Costco, Bestbuy, etc. They should not be allowed to benefit from their support of the rogue US government. We must as Canadians work together with Europe, Asia etc. To defeat this aborition in the US. We must also work to rebuild our infrastructure that was destroyed by Trudeau so we can export to Countries that wish to be partners not bullies." — entender1012

"We have been told it's going to happen, so we have been expecting it. Anyone who is surprised by it hasn't been watching the news." — suebeeseed

THE ECONOMY
Canada’s Economy Grows Faster Than Expected

• GDP rose 2.2% in Q1, beating forecasts

• Growth driven by exports and inventory build-up

• Domestic demand and household spending stayed weak

• Key input for Bank of Canada’s rate decision

As I noted above, Canada’s economy expanded at an annualized pace of 2.2% in the first quarter, beating market expectations of 1.7% and building slightly on the previous quarter’s revised 2.1%. That top-line number looks strong, but the underlying details show a far more complex, and fragile, picture. Much of the growth came from companies racing to ship goods before U.S. tariffs took hold, as well as inventory accumulation, not from robust consumer or business demand at home.

Tariff Flip-Flops Boost Trade Volatility

Exports spiked as U.S. firms scrambled to buy Canadian goods ahead of tariff hikes announced by the Trump administration. Imports also rose, further bloating inventories and masking weak final domestic demand. Economists suggest this trade-driven boost may not last, especially if tariffs persist or escalate.

Douglas Porter, BMO Chief Economist, said in a note to clients that the numbers may be misleading.

Household Spending Still Sluggish

Final domestic demand, which is a critical barometer of internal economic strength, was flat for the first time in over a year. Lower household spending and stalled investment are signs that Canada’s growth might stall without continued trade tailwinds. Analysts widely expect the GDP reading to influence the Bank of Canada’s upcoming interest rate decision, with markets split on whether a rate cut is imminent.

Read More Here

IN PARTNERSHIP WITH HARVEST ETFS
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Learn more about HHL here.

Disclaimer

Commissions, management fees and expenses all may be associated with investing in Harvest Exchange Traded Funds managed by Harvest Portfolios Group Inc. (the “Funds” or a “Fund”). Please read the relevant prospectus before investing. The Funds are not guaranteed, their values change frequently, and past performance may not be repeated. Tax investment and all other decisions should be made with guidance from a qualified professional. Distributions are paid to you in cash unless you request, pursuant to your participation in a distribution reinvestment plan, that they be reinvested into the Class of units that you own of the Fund.

CONSUMER DEBT
Missed Credit Payments Spike Across Canada

• 1.4 million Canadians missed a payment in Q1

• Younger borrowers are increasingly delinquent

• Total consumer debt hit $2.55 trillion

• Ontario faces growing financial stress

A new Equifax report reveals that 1.4 million Canadian consumers missed at least one credit payment in the first quarter of 2025, a clear sign of rising financial stress. The trend is particularly striking among younger Canadians, with delinquencies up over 20% year-over-year. What makes this even more interesting, and perhaps concerning, is that this comes at the same time average monthly credit card spending has dropped.

This shows a pullback in discretionary spending during economic uncertainty.

Debt Grows Even with Lower Spending

The report shows that average non-mortgage debt rose to $21,859 per consumer, driven in part by a rush to secure auto loans ahead of potential price hikes due to tariffs. (What part of the economy hasn’t the tariff turmoil affected?) We have seen reduced credit card spending, but even so, more people are falling behind, which suggests essentials and fixed costs are eating into budgets.

Ontario Emerges as a Stress Epicenter

Ontario saw the steepest rise in delinquencies, with mortgage non-payment rates up 24% year-over-year. Rising interest rates and expiring pandemic-era mortgage terms are weighing heavily. Equifax calls this wave of renewals “the great renewal”, and highlights the squeeze many homeowners face as they roll into much higher monthly payments. Another thing we can’t ignore is that with economic uncertainty on the rise, missed payments could ripple down into broader business and employment impacts.

Read More Here

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INTERNATIONAL TRADE
Tariff Tensions Rise Again Between U.S. and China

• Trump accuses China of breaking tariff truce

• China denies wrongdoing, blames U.S. restrictions

• U.S. concerned over slow Chinese compliance

• Trade talks show signs of stalling again

Trade tensions between the U.S. and China are back just weeks after the two sides agreed to a temporary easing of tariffs. President Trump accused China of violating the terms of their truce, without offering specifics (imagine that), and U.S. trade officials criticized Beijing’s failure to remove certain non-tariff barriers. China fired back, urging the U.S. to “cease discriminatory restrictions.”

Truce Breakdown Raises Market Risk

U.S. Trade Representative Jamieson Greer warned that China’s slow progress on lifting restrictions was “unacceptable,” adding that blacklists and export controls had yet to be rolled back. He emphasized that while the U.S. met its obligations, China’s compliance was dragging. This prompted fears that the trade ceasefire could unravel entirely. Greer told CNBC, “We’re very concerned.”

Uncertainty Threatens Economic Momentum

The broader concern is that businesses, with so many already cautious due to tariffs, will delay decisions further if the situation deteriorates. Treasury Secretary Scott Bessent acknowledged talks had “stalled” and would likely require direct involvement from both presidents. Meanwhile, the U.S. is tightening restrictions on Chinese students and semiconductors. Adding to the uncertainty, a federal court ruling questioning Trump’s tariff authority, pretty much assures that legal battles will continue to add yet another layer of uncertainty to an already unstable dynamic.

Read the full story here.

EMPLOYMENT
Long-Term U.S. Unemployment Hits Two-Year High

• 1.7 million Americans unemployed 6+ months

• Young grads hit hardest by hiring freeze

• Tariffs blamed for cooling job creation

• Many job seekers exhausting savings, benefits

We’ve seen some not-too-bad headline job numbers in the U.S., but long-term unemployment in the U.S. has climbed to its highest level in over two years. Nearly 25% of unemployed Americans have been out of work for six months or more, according to the Labor Department. The data challenges the notion of a strong labour market and points to mounting struggles for job seekers, especially recent college graduates.

Tariff Uncertainty Stalls Hiring Plans

What’s happening is that employers are cautious about adding staff due to fears around Trump’s global tariff policy. Human resources firms report a dramatic slowdown in job postings and hiring. Applications per job on LinkedIn are up 45% year-over-year, adding competition for fewer openings.

Grads and Experienced Workers Alike Struggling

New grads like cybersecurity student Jessica Chibuzor-Muko report submitting thousands of applications with little success. Even experienced professionals are expressing similar frustration, often losing out to candidates who are already employed. Many are draining savings and maxing out credit just to get by. No doubt in my mind that the longer this continues, the harder it will be for the long-term unemployed to re-enter the workforce and the wider the divide becomes between job market stats and lived experience.

Read the full Story Here

OTHER NEWS FROM THE PAST WEEK

More Canadians plan to carry mortgage debt into retirement
A Royal LePage survey shows more Canadians expect to retire with mortgage debt as high interest rates and housing costs delay repayment timelines, raising long-term concerns for financial security in older households.

Summer rentals in the Hamptons are down 30%
The Hamptons rental market has cooled sharply, with average summer rents falling by nearly a third as fewer renters seek premium properties amid broader affordability pressures and vacation cutbacks.

My returns rarely hit 6%. Should I fire my adviser?
With modest portfolio returns and high fees, many investors are re-evaluating the value of their financial advisers—wondering if passive strategies or robo-advisers might deliver better long-term results.

Loblaw’s bread price-fixing payout begins
Canadians are finally receiving payments from Loblaw’s $25 gift card settlement related to the company’s role in a long-running bread price-fixing scandal that has fueled anger over grocery costs.

Fast fashion thrives despite economic turbulence
Fashion retailers are seeing surprising strength as shoppers turn to fast fashion and trend-driven purchases to cope with economic anxiety—highlighting how spending priorities shift under financial stress.

Why Does Canada Want to Kill 400 Ostriches?
An H5N1 avian flu outbreak among ostriches in South Africa raises fresh biosecurity concerns, with experts warning the virus’s evolution could increase risks to poultry farms and even human health.

Back in the early 2000s, Dollarama was known for its steadfast commitment to the $1 price point. However, as inflation crept in and costs rose, the company faced a dilemma: raise prices or compromise on product quality. In a move that surprised many loyal customers, Dollarama began introducing items priced above $1, eventually reaching up to $5. This shift was met with skepticism, but it turned out to be a masterstroke. By offering a broader range of products at slightly higher price points, Dollarama attracted a wider customer base and boosted its profitability. Today, it's a testament to how bending the rules—just a little—can lead to greater success.

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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