Sunil's Blog & Market Update

Looking back at past geopolitical events, history shows that markets often fall first and recover quickly after geopolitical events.

Stock markets were mixed in February. The S&P/TSX Composite Index had a strong month, driven by strong materials and energy stocks. The MSCI EAFE Index also gained ground, while U.S. stock indexes were generally weaker. Fixed income was generally stronger across the board.

The beginning of U.S. and Israeli military operations against Iran prompted swift retaliatory action, which included an attempted drone strike on Qatar’s energy infrastructure. While no damage was recorded, a major liquefied natural gas terminal .

The United States and Israel’s attack on Iran continues to expand, with both sides striking targets across several countries in the Middle East. What should investors know about the escalating conflict as it continues to evolve?   

The U.S. will charge a 15% tariff rate on the vast majority of EU goods. Key exceptions are steel and aluminium (where the tariff rate will remain at 50%) and aircraft, plus some other goods where the tariff will be zero. Autos, semiconductors, and pharmaceuticals also appear to be subject to the 15% tariff, which is positive given fears of more unfavorable treatment of these sectors.

Investors seem more comfortable with the idea of tariffs, but they’re still likely to play a key role in the direction of financial markets as we approach the final stretch of the year.

The old adage “what goes up, must come down” aptly describes a dynamic economy that has historically followed a cycle of growth and decline. The down period in that cycle constitutes a recession, which affects investment returns across various asset classes.

Recent tariff announcements and the potential for escalating trade tensions with key U.S. partners are raising concerns about the return of stagflation, a challenging economic scenario characterized by high inflation, weak growth, and high unemployment.

The intersection between the macro backdrop and the market setting investors must navigate has perhaps never been more apparent than it is today.

Under the new U.S. framework, all countries face a 10% baseline tariff, with significant variations above that depending on country-specific trade policies

In 2025, the U.S. equity market is once again showing signs of imbalance. While the S&P 500 continues to post gains, the rally is being powered by a familiar engine; a handful of mega-cap tech names. Beneath the surface, however, lies a vulnerability that investors shouldn’t ignore—concentration risk.

Inflation affects all aspects of the economy, from consumer spending, business investment and employment rates to government programs, tax policies, and interest rates.

Young families are being driven from Ontario’s biggest cities, with misguided policies and conversions to rental units limiting the supply of affordable homes with three bedrooms or more, according to the University of Ottawa’s Missing Middle Initiative.

THERE’S NO SHORTAGE OF CRISES: A bloated U.S. debt and a jittery bond market; the unwillingness of Vladimir Putin to negotiate, etc. But there’s one crisis that dwarfs all the rest: Iran.

Canada’s annual inflation rate remained flat at 1.7 per cent in May, according to the latest data from Statistics Canada released. Economists say Bank of Canada (BoC) policymakers will likely need to see more convincing data to justify a rate cut on July 30.

Developing the infrastructure necessary to make Canada’s economy less dependent on trade with the U.S. “will not be easy, fast, or cheap,” and will require refocusing investment priorities.

Canada’s economy shrank 0.1 per cent on a monthly basis in April, Statistics Canada said on Friday, a slower pace than analysts had expected. The contraction was largely the result of broad-based weakness in the manufacturing sector during a month characterized by heightened trade tensions with the U.S.

DONALD TRUMP is eager to proclaim victory on trade deals. What a transformation — he finally listened to the critics and he now has made it clear that the virulent market reaction drove him to this tariff reversal.

DONALD TRUMP GOT THE ROUGH OUTLINES of a trade deal with the United Kingdom — but in Washington there was shock over Donald Trump’s latest head-scratcher.

DONALD TRUMP’S “BIG BEAUTIFUL TAX BILL” is in trouble, especially in the House, where backers of the measure are short by at least a dozen votes.