May 2025
Stéphane Rochon, CFA, Equity Strategist; Richard Belley, CFA, Fixed Income Analyst; Russ Visch, CMT, Technical Analyst; Eric Yoo, Associate; Ernad Sijercic, Associate
The S&P 500 has Stabilized but Our Call Has Not Changed: Use Strength to Reduce Risk in Portfolios
Investors dodged a bullet when Trump recently paused the imposition of extremely high tariffs on most trading partners. To use an extreme example, Madagascar was in the firing line for 47% tariffs. This struck us as both absurd and sad for its impoverished people. As widely reported in the media, it was the outsized weakness in the U.S. Treasury Bond market which may have convinced the Trump Administration to relent for now. And for good reason. The fact that U.S. stocks, bonds and the U.S. dollar all went down in unison was a clear sign that the U.S. is losing some of its safe haven halo. This is in stark contrast to what we saw at the height of the financial crisis in 2008 when U.S. Treasuries fulfilled their role as a safe asset class, thus helping mitigate the damage in well diversified portfolios.
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Do not hesitate to give either of us a call at 416 359-7565 or 416-359-7564 or email Sharon Kubicek or Alisa Carli if you have any questions respecting your portfolio and the prevailing investment, economic and political issues at play today.