Market Outlook - May 2025

We are of the view that a deal will be announced between Canada and the US, possibly even before the G7 meetings, which will unlock the decision-making process within the “trade-exposed” industries that have been on pause due to uncertainty. We believe this will create a very positive second half as earnings expectations were set quite low in our opinion. As trade tensions fade from memory and the economic conditions normalize, positive earnings will result in revisions to the upside for equity markets in general, which will be a decisive tailwind for both Canadian and US stocks into the end of the year. What we’re seeing is a classic case of companies setting the stage to under promise and over deliver. To put it bluntly, we see a positive outcome to all this tariff business and as the chaos and noise it created fades, so too will investor fear. Bottom line, once investors have clarity and see improved earnings, higher stock prices are sure to follow.

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