Investment update
Weekly insight into the marketplace.
May 12 to 16, 2025
Canada’s TSX hit a record high
News that the U.S. and China agreed to reduce tariffs on each other's goods over the previous weekend sent markets surging higher on Monday. In a joint statement, the two governments said U.S. tariffs on Chinese imports would be lowered from 145% to 30%, and China would cut its tariffs on U.S. goods from 125% to 10%. The Dow closed 2.8% higher, the S&P 500 added 3.3% and the Nasdaq gained 4.4%. Canada's TSX tracked its U.S. counterparts, increasing 0.7%. Better-than-expected U.S. inflation data boosted investor sentiment again on Tuesday with the S&P 500, the Nasdaq and the TSX (which also benefitted from higher oil prices) recording another daily gain. The Dow was held back by a 17.8% slide in shares of UnitedHealth after the insurance giant suspended its annual forecast and CEO Andrew Witty suddenly resigned. The Dow declined again on Wednesday, while the S&P 500, the Nasdaq and the TSX all notched another win. Thursday was a more subdued trading day, but the S&P 500 extended its winning streak to a fourth day with a 0.4% increase and the TSX also closed higher for an eighth session. The Dow added 0.6%, while the Nasdaq shed 0.2%. Shares of UnitedHealth plunged a further 18% on Thursday after the Wall Street Journal reported that the U.S. Department of Justice was launching a criminal investigation into the company for potential Medicare fraud. On Friday, the TSX gained 0.3% to reach a new closing high, and a sixth straight weekly gain. The Wall Street benchmarks also ended the day higher and were firmly positive for the week.
American consumer prices cooled in April
U.S. inflation cooled for a third straight month in April according to the Department of Labor’s latest consumer price index (CPI) report. Despite concerns about tariffs, some of which have started to take effect, CPI rose 2.3% year-over-year, down from March’s 2.4% pace, and the smallest increase since February 2021. On a monthly basis, CPI increased 0.2% from March to April after falling 0.1% the month prior (the first decline in five years). New and used cars, air fares and cell phones were notable detractors. Food prices, which have made headlines in recent months, were down 0.4% from March to April. The price of eggs dropped 12.7% but are still 49% higher than they were 12 months ago.
Walmart raised alarm on higher prices
U.S. retail sales data, released on Thursday, showed only a modest 0.1% increase in April, which suggests American consumers have started to change their spending habits. The uptick was well below March’s 1.7% jump, when shoppers rushed out to beat the tariff-related price hikes. It was a notable slowdown for markets to digest, but a price-hike warning from Walmart was even more direct. On Thursday, the largest retailer in the U.S., which reported strong first quarter results, told its customers that higher prices will really start to weigh on wallets in June and July. "We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins," CEO Doug McMillon said in a statement. In Canada, Loblaw chief executive Per Bank wrote in a LinkedIn post on Wednesday: "While the tariff situation might be improving between the U.S. and other countries, that's not yet the case here in Canada. In fact, we'll be facing a large wave of tariff-related increases in the weeks ahead."
The stock and bond market*
| Index | Close | Week | YTD |
|---|---|---|---|
| S&P/TSX Composite | 25,971.93 | 2.42% | 5.03% |
| Dow Jones Industrial Average | 42,654.74 | 3.41% | 0.26% |
| S&P 500 Index | 5,958.38 | 5.27% | 1.30% |
| NASDAQ Composite | 19,211.10 | 7.15% | -0.52% |
| 10-year Canadian Bond Yield | 3.25% | 0.10% | 0.02% |
| 10-year U.S. Treasury Yield | 4.43% | 0.06% | -0.15% |
| WTI Crude Oil (US$/barrel) | $62.49 | 2.41% | -12.87% |
| Canadian Dollar | US$0.7159 | -0.24% | 2.98% |
| Bank of Canada Prime Rate 4.95% | |||
*Weekly performance ending May 16, 2025. Source: Bloomberg.
Stay the course. The market’s day-to-day ups and downs can be stressful. But it’s important to put market performance into perspective, while keeping your goals front and centre. Staying invested – and continuing to invest – throughout market fluctuations is the best way to capitalize on likely market recoveries. If you have questions about your investments, a Co-operators financial representative is always ready to help.
Canadian inflation data (May 20): The annual inflation rate fell to 2.3% in March, down from an eight-month high of 2.6% in February, and below the Bank of Canada's 2.5% forecasts. Core inflation, which removes the most volatile items, also cooled marginally. Cheaper travel and cellphone costs, along with lower gas prices, helped drag inflation lower for the month.
Circle these dates
May 26: U.S. markets closed for Memorial Day
June 4: Bank of Canada interest-rate decision June 17 to 18: U.S. Federal Reserve interest-rate decisionThe commentary in this report is based on current market conditions and market media sources available to the public and may change without prior warning at any time. The forecasts provided herein are not guarantees of future performance and include risks, uncertainty and assumptions. While Co-operators Life Insurance Company (“Co-operators”) believes these assumptions are reasonable, there is no guarantee they will be confirmed. This report is not a guarantee of future investment performance, nor should undue reliance be placed on this report. This report is provided as a general source of information for a specific point in time and should not be considered solicitation to buy or sell any investment. Nothing contained in this report constitutes investment, legal, tax or other advice. The content in this report should not be relied upon in making an investment or other decision, and individuals should obtain relevant and specific professional advice and read the terms and conditions contained in the relevant offering documents carefully before any investment decision is made. Co-operators is not responsible for any loss or damage as a result of reliance on the information contained in this report. Co-operators makes no representations or warranties as to the information contained herein and does not guarantee its accuracy, timeliness, completeness or usefulness. Co-operators is committed to protecting the privacy, confidentiality, accuracy and security of the personal information it collects, uses, retains and discloses in the course of conducting business. Please visit cooperators.ca/privacy for more information. Co-operators® is a registered trademark of Co-operators Group Limited and is used with permission. Investing in your future. Together.TM is a trademark of Co-operators Group Limited. If you are a client who has received this, and you have questions or want to discuss your investments, please contact your Financial Advisor.
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