The Week in Review

Weekly Market Recap: U.S. and Canada

It’s almost like “Liberation Day” never happened. At the close of this week, the major North American markets are pretty much back to they were back on April 2, when President Trump announced his economic war on the world. The strong bump we saw mid-week helped reverse the early losses, and optimism returned around U.S. jobs data and easing trade tensions. The Nasdaq 100 led the charge, and both the S&P500 and Dow Jones posted solid gains. The TSX underperformed but still managed to close higher.

For the week, the Nasdaq 100 gained 3.34%, while the S&P 500 rose 2.89%. The Dow Jones added 2.96%, and the TSX brought up the rear with a 1.27% gain. Obviously, investors were feeling more confident after last month’s choppiness, although I wouldn’t go so far as to say that we’re out of the woods yet.

Major Economic Stories

Just a heads up… this week’s economic recap will be a bit longer than normal. There was just so much important data that came out, I didn’t want to miss anything important. If you’re an economic junkie, you’ll be ok, but if you’re not, I’ll just have to ask you to bear with me.

The narrative this week centered around early signs of slowing growth and shifting labour dynamics in the U.S. We saw resilient job numbers which kept markets guessing on central bank policy.

Here are the main stories of the week.

Canada GDP Shows Modest Growth

Canadian GDP posted a slight monthly gain in March, a hopeful sign of stability.

March’s small uptick was powered by retail, mining, and transport gains, while declines in manufacturing and construction offset some momentum. The first quarter appears modestly positive, but the month-to-month swings suggest fragility.

• GDP rose 0.1% in March, after a 0.2% dip in February

• Q1 2025 is tracking for 0.4% total growth

• Goods-producing sectors fell 0.6% in February

• Finance and insurance rose 0.7%, softening the overall decline

U.S. Economy Contracts as Imports Surge

The U.S. economy shrank 0.3% in Q1, reversing prior growth.

A sharp jump in imports and weakening government spending led to the first quarterly contraction in three years. Fixed investment was a bright spot, but consumer spending is cooling amid trade policy uncertainty.

• U.S. GDP fell 0.3% in Q1 2025

• Imports spiked 41.3%, dragging down overall growth

• Consumer spending growth slowed to 1.8%

• Government expenditures fell 5.1%

• Read the Full Release

U.S. Job Openings Fall to 6-Month Low

Job openings little changed, but at a new 6-month low.

Hiring remains steady, but reduced postings suggest firms are holding off on expansion. Sectors like construction and healthcare saw the biggest pullbacks.

• Openings fell by 288,000 to 7.192 million

• Hires unchanged at 5.4 million, quits steady at 3.3 million

• Major declines in transport, hospitality, and healthcare

• Job postings rose slightly in finance and manufacturing

• Read the Full Report here.

U.S. Jobs Data Exceeds Expectations

The U.S. economy added 177,000 jobs in April, beating forecasts.

Even though we’re in the middle of a trade war, the U.S. labor market remained surprisingly resilient in April.

• 177,000 jobs added vs. 130,000 expected

• Unemployment rate held steady at 4.2%

• Healthcare led with +51,000 jobs

• Federal government employment fell by 9,000

• Full Report Here

U.S. Unemployment Steady at 4.2%

Unemployment remained flat as the labor force grew.

Participation edged up and job creation outpaced unemployment growth. Broader U-6 unemployment declined slightly, showing a labor market still absorbing shocks.

• 436,000 jobs created; 82,000 new unemployed

• Labor force participation rose to 62.6%

• Employment-population ratio ticked up to 60%

• U-6 unemployment fell to 7.8%

• Full Employment Report Here

Key Takeaways From this Week’s Economic News

A Surprising U.S. Contraction Raises Recession Flags

Like I said above, it was a very busy week of economic news, especially U.S. Labour related. The U.S. economy shrinking in Q1 wasn’t just unexpected, it was a sure sign that the impact of trade policy is beginning to spill into real economic outcomes. Imports spiked, government spending fell, and consumer caution began to surface.

This feels like a clear case of policy shock meeting market psychology. Businesses rushed to stockpile goods, which inflated imports and weighed on GDP. If policy volatility continues, (all bets are off on this) there’s a real risk it could deepen into something more troubling.

The Job Market Holds, But Cracks Are Appearing

Adding 177,000 jobs is strong on paper, but the drop in job openings suggests a cooling under the surface. Some firms will no doubt be pausing hiring plans in response to tariff-related uncertainty.

So far, employers are hanging on to workers, but if confidence dips, layoffs could follow. For now, it’s a steady job market, but there’s a limit to resilience, and I think we can expect some choppier numbers in the months to come.

Canada’s Growth Is Tepid, but Avoiding Trouble

What does Canada’s 0.1% GDP growth in March tell us? It’s a narrow path forward. The good news is that the economy isn’t in decline, but it’s fragile. Strength in mining and finance is offset by softness in manufacturing and real estate.

As long as energy and retail hold up, Canada may sidestep global slowdowns. But there's little room for error or shocks.

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

I always keep an eye out during the week as I contemplate what my weekly poll question will be. Well, this week, it went right down to the wire. News broke today that at the annual Berkshire Hathaway general meeting, Warren Buffett announced he would be retiring before the end of the year. (By the way, by the end of the year he’ll be 95, so I guess we’ll have to cut him some slack.)

Instantly, my poll question was finalized. What impact will Buffett’s retirement have on the share price of this storied company? I look forward to hearing what you all have to say.

LAST WEEK’S POLL RESULTS

I’m not surprised with last week’s poll results, which asked how the ongoing trade war will affect your personal financial decisions. I doubled down with two questions and both resulted in our readers saying they will take a more cautious approach while we see how this all plays out.

Comments of the Week

A: Willingness to make “Big Purchases”

No Change

”Fortunately my big purchases were planned last year. Even with the current situation I continued. Nothing in the near future.” - ddamude

Lower

”How can you plan ahead when no one knows how everything is going to play out?” - storierod

Higher

”I have no choice.  We need a new car.” - thompsond1951

B: Tighten Up or Carry On

Tighten Up

”I do a few low spend months a year. May is a low spend month after a lavish vacation in April that I saved for 4 years for.” - suebeeseed

”Staycations are on tap this year for us to avoid USA travel, which is a big savings in itself.” - susanwheelerhall

Carry On

”I’m a retiree and have a solid retirement income so don’t plan on tightening up. Travel is important to us and that will continue”. - [email protected]

”If you plan for the unexpected you will be ok. The current American administration counts as unexpected. You can only have a contingency plan as the tarrif on, tarrif pause threats can't be planned for until it happens.” - ddamude

THE STOCK MARKET

S&P 500’s 9-Day Rally Defies Trade Turmoil

• S&P 500 posts longest winning streak since 2004 

• U.S. and Canadian stocks erase April’s tariff-driven slump 

• Broad market gains driven by strong job report and tech 

• Tariff delays and earnings optimism fuel investor confidence 

The markets shrugged off tariff fears this week, with the S&P 500 notching its longest winning streak in two decades. Investors piled back into stocks, which sent all major U.S. indices sharply higher, reclaiming losses made after the Trump administration’s aggressive trade actions earlier in April. Our very own TSX also rallied, lifted by industrials and energy stocks, and ended at a one-month high.

Jobs Data Ignites Rebound 

The major spark behind the rally came from Friday’s stronger-than-expected jobs report (above). With 177,000 jobs added in April, markets saw signs that the labor market remains resilient, especially in sectors like healthcare and transportation.

Tariff Anxiety Isn’t Over 

So the rally is nice, but uncertainty hasn’t gone anywhere. The huge tariffs against China are still in effect, as well as the other now ‘normal’ ones, and others may kick in come July.

Chris Zaccarelli, chief investment officer at Northlight Asset Management, put everything into perspective in an email:

Companies are already revising forecasts and delaying investments. That said, optimism is building that negotiations could roll back the most damaging measures. Treasury yields rose, a sign of reduced demand for safe-haven assets. For now, Wall Street is leaning toward hope, though one policy misstep could erase those gains quickly. 

THE CANADIAN ECONOMY
4 Priorities to Rebuild Canada’s Economy

• CEOs urge fast action post-election to stimulate growth 

• Energy infrastructure and interprovincial trade top the list 

• Defence manufacturing could boost jobs and GDP 

• AI seen as a major economic opportunity 

As Canada settles in with a new federal government, business leaders are pushing for (ok, let’s just call it demanding) bold action to jumpstart the economy. After years of sluggish growth, and with U.S. tariffs adding pressure, industry voices are calling this a “generational opportunity” to rebuild Canada's economic foundation. From pipelines to artificial intelligence, the consensus is that the new prime minister must pick a direction fast and follow through.

Energy, Trade, and Defence in Focus 

CEOs are looking for swifter approval for resource projects, especially in the energy sector. François Poirier of TC Energy described the current moment as “time-bound,” and is urging the federal government to overhaul regulatory bottlenecks and unleash energy exports. Both Liberals and Conservatives agree that interprovincial trade barriers must finally be dismantled. Meanwhile, meeting NATO's defence spending target could stimulate job growth. Defence contracts come with economic offsets, meaning investments would be directed back into Canadian firms.

AI as a Strategic Advantage 

Canada also holds a potential edge in artificial intelligence, thanks to our hydro-powered energy supply and talent-rich research sector. The Liberals have pledged to expand AI funding, and that could shape the sector’s future significantly. We have housing, productivity, and global competitiveness all under strain, and the new government’s ability to execute these priorities could define Canada’s economic trajectory for the next decade. 

Read the full story here.

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HOUSING CRISIS

Why Canadian Housing Became Unaffordable

• Canada’s housing price-to-income ratio diverged in 2007–08 

• Ultralow interest rates fueled investor-driven demand 

• Supply constraints worsened the affordability crisis 

• Personal debt levels now among highest in major economies 

Other than the ultra-wealthy among us, pretty much everyone of us knows somebody who is struggling with Canada’s housing crisis. And the housing affordability crisis didn’t happen overnight. According to long-term data and analysis, the true tipping point came around 2007–08, when the Bank of Canada slashed interest rates in response to the global financial crisis. Unlike the U.S., Canada avoided a housing crash, but the side effect was a long, slow burn toward widespread unaffordability.

The Rate Cut That Changed Everything 

After the financial crisis in 2008/2009, Canada kept interest rates near zero for years. That certainly helped stimulate borrowing and prevented a collapse, but it also turbocharged demand, especially from investors. Leveraged buying became the norm, pushing home prices far beyond income growth. “The right medicine, but the wrong dose and duration,” wrote economist Hanif Bayat.

Now, Canada’s ratio of home price to disposable income has stayed elevated for more than a decade.

Speculation and Policy Distortion 

What made matters worse was a supply bottleneck, largely driven by zoning restrictions, permit delays, and interprovincial development barriers. But it was monetary policy that bent the curve the most. Investors piled into the market seeking high returns on cheap leverage, pushing traditional homebuyers to the sidelines and escalating prices. Now, with a price-to-income ratio that peaked at 16 in 2022, Canadians are carrying some of the highest household debt in the developed world. It’s a cautionary tale of what happens when speculative demand outpaces real income growth, and why monetary decisions often have long-term consequences. 

Read the Full Story here.

U.S. LABOR

U.S. Jobs Growth Beats Expectations, But Cracks Are Emerging

• 177,000 jobs added in April, exceeding forecasts

• Unemployment steady at 4.2%, labor force participation ticks up

• Job openings fell to a 6-month low in March

• Hiring strong in health care and logistics, but federal jobs declined

As you could see in the new economic data earlier in this edition, the U.S. labor market is continuing to defy expectations - at least on the surface. Employers added 177,000 jobs in April, blowing by the consensus estimate of 130,000 and continuing a steady trend in hiring. The unemployment rate held at 4.2%, while labor force participation edged slightly higher, another sign of continued engagement from working-age Americans. But, when you look under the hood, you’ll see signs of cooling, especially in job postings and sector-specific hiring activity.

Solid Gains, But Mixed Momentum

Job growth in April was led by health care (+51,000), transportation and warehousing (+29,000), and financial activities (+14,000), while the federal government shed 9,000 positions. The headline number was strong, but this was a step down from March’s revised gain of 185,000, and the monthly average of 152,000 over the past year reflects a gradually moderating pace. Employment rose by 436,000 people, while at the same time the number of unemployed increased by 82,000, and that kept the jobless rate flat. Importantly, the U-6 unemployment rate, which includes discouraged and underemployed workers, nudged down to 7.8%, an encouraging sign.

Job Openings Signal Softening Demand

Also, the broader labor market may be plateauing. In March, job openings fell by 288,000 to 7.192 million, a six-month low and missing expectations. The declines were broad-based, with the steepest drops in transportation, hospitality, construction, and health care, sectors that had previously led pandemic recovery. Meanwhile, job openings ticked higher in finance, education, and manufacturing. Hires held steady at 5.4 million, while layoffs and quits showed little change, a sign that employers are still reluctant to reduce staff even though they are taking a more cautious stance.

So, what picture does this paint?

Overall, April’s jobs report painted a picture of resilience, but not without caveats. We had solid gains in employment and steady unemployment, which signal a labor market that’s still fundamentally healthy. But we also saw job openings fall to a six-month low and federal hiring pull back, so it’s clear that employers are becoming more cautious. That, to me, is the key thing we need to watch for. Participation is rising, wages are stable, and hiring remains broad-based, but softening demand in key sectors suggests we may be near the peak of this cycle. The headline numbers are reassuring, for now, but forward-looking indicators are flashing yellow.

OTHER NEWS FROM THE PAST WEEK

Other News Summaries

B.C. wineries benefit from U.S. booze boycott
Tariff-related boycotts of American alcohol are boosting B.C. wine exports, giving the region’s wineries unexpected traction with new customers.

McDonald’s hit with biggest U.S. sales drop since pandemic
U.S. sales at McDonald’s slumped the most since 2020, as inflation-weary diners look for cheaper alternatives.

Trump’s tariffs: The price of spice
Trump’s tariffs are disrupting global spice supply chains, forcing restaurants and grocers to raise prices or find alternatives.

Business groups push Carney’s Liberals for action
Business leaders urge Canada’s new PM to prioritize productivity, trade reform, and energy infrastructure right out of the gate.

Is Trump winning the DEI fight?
Some U.S. companies are walking back DEI efforts amid political backlash, though internal advocates say the work is shifting—not disappearing.

Illinois players claim $349M Mega Millions jackpot
A low-profile Illinois group claimed the $349M jackpot, saying they plan to share quietly with family and community causes.

Trump’s tariffs hit golf cart industry
Golf carts—Trump’s second-favorite ride—are now caught in tariff crossfire, with prices climbing and delivery times lengthening

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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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