Good morning. The uncertainty generated by the U.S. administration’s actions is leading even the investing pros to different conclusions about what it all means for markets. Stocks have rallied since taking a nosedive after U.S. President Donald Trump instituted unexpectedly high tariffs on most countries on “Liberation Day,” April 2. But what does this mean longer-term?
U.S. market's whiplash rally has momentum on its side and may have room to run
History shows that the rally may extend further than investors might expect and bode well for stock performance down the road, according to data analyzed by WisdomTree’s Jeff Weniger. Factors driving market gains include movement on trade deals, fund managers raising their exposure to equities and stronger than expected earnings from many of the big tech stocks driving the S&P 500.
But with tariff effects starting to be seen in company results, bond yields, and the U.S. economy, the biggest market driver is still uncertainty.
Investors will feel pain as stocks recovery is typical of bear market rallies, Goldman says
The steep recovery in equity markets over the past couple of weeks is typical of bear market rallies, according to a Goldman Sachs Group Inc. strategist. And the erratic swings mean almost every investor will experience pain whichever direction the market suddenly moves. “Sharp rallies within bear markets are the norm, not the exception,” Peter Oppenheimer said.
If only we could all navigate investing like the legendary Warren Buffett. Speaking of the Oracle of Omaha, after 60 years at the helm of Berkshire Hathaway Inc., which he built into a US$1.16 trillion investing juggernaut, he announced his successor, who hails from Canada.
Warren Buffett's Canadian successor is a billionaire without many Berkshire shares
Greg Abel, 62, who hails from Edmonton and will replace Buffett as Berkshire’s chief executive at the end of the year, holds about US$175 million worth of stock. That makes up about 18 per cent of his US$1 billion net worth, according to the Bloomberg Billionaires Index, which is valuing his fortune for the first time.
Who is Greg Abel, the Canadian tapped to succeed Warren Buffett as CEO of Berkshire Hathaway?
Shareholders in Berkshire, as well as investors who have been following Buffett’s investing strategies, will be watching how the new CEO will handle challenges such as what to do with Berkshire’s approximately US$350 billion cash pile after Buffett struggled to find companies to invest in that could outperform the sky-high valuations of U.S. stocks. Shareholders will also be waiting to see whether Abel can command the same confidence among investors as his predecessor — the so-called “Buffett premium.”
As CEOs and others rushed to praise the man who delivered a more than 5,500,000 per cent return on Berkshire’s stock, Warren Buffett’s favorite valuation indicator flashed a buy signal, bolstering the case that the rebound in U.S. stocks has room to run.
Wishing everyone a good end to the week,
Christina Varga, Financial Post’s Wealth and Investing editor. If you have any tips, quips or queries, get in touch at cvarga@postmedia.com. |
|
|
Bad news for BCE dividend investors. BCE Inc. cut its quarterly dividend payment to shareholders, its first cut in 17 years. The company said it will now pay a quarterly dividend of 43.75 cents per share, down from 99.75 cents per share. The decision cuts BCE’s annualized dividend to $1.75 per common share from $3.99.
Bad news for RBI (Tim Hortons) investors. Restaurant Brands International Inc., the parent company of Tim Hortons, saw earnings fall short in the first quarter of 2025 as consumer confidence dropped. Tim Hortons accounts for more than 40 per cent of RBI’s quarterly revenue and its same store sales fell this past quarter.
Bad news for Palantir investors. Palantir Technologies Inc., whose stock led the S&P 500 in gains this year, failed to produce results that lived up to investors’ lofty expectations. The data analytics firm, co-founded by billionaire Peter Thiel, rode a wave of AI enthusiasm, sending its stock soaring, but investors worry the company can’t sustain its valuation going forward.
Mixed news for Shopify shareholders. Shopify Inc. on its first-quarter earnings call said the e-commerce firm had not seen a significant impact from tariffs on sales taking place on its platform. But the gross merchandise volume metric it uses to track sales fell slightly short of analyst expectations. Despite a jump in revenue, the company’s loss deepened to US$682 million from US$273 million from a year ago.
Good news for Disney investors. Walt Disney Co. reported fiscal second-quarter results that beat Wall Street estimates and raised its outlook for the full year, citing strong performances from theme parks and streaming TV. Excluding some items, Q2 earnings rose 20 per cent to US$1.45 a share.
|
|
|
With lower growth, higher interest rates and trade uncertainty, investors should seek areas of resilience and opportunity, says portfolio manager Martin Pelletier. As profit margins shrink and companies slow their capital spending and redirect resources toward share buybacks and dividends, opportunities will become more sector-specific.
ROAD AHEAD
|
|
|
Trump’s tariffs, wars, inflation, job losses, stock market volatility, a slowing economy, “it’s not all roses out there,” as investors contemplate U.S. stocks, writes portfolio manager Peter Hodson. But while investors fear the economic effects of a downturn, they can create stock market opportunities.
ROAD AHEAD
|
|
|
One of the things to think about, says financial planner Allan Norman, is to consider delaying CPP and OAS to age 70 and revisit a 60/40 equity to fixed income investment portfolio. GET THE ANSWER If you have an investing or personal finance question, hit us up at wealth@postmedia.com. |
|
|
Though a taxpayer tried to fix her accidental excess contribution, she still ended up owing CRA $2,272, tax court found. Tax expert Jamie Golombek lays out how this case went and what we can learn from it. TFSA TAX |
|
|
The B.C. pair in their 40s are about 10 years away from retirement and say they need income of at least $4,800 a month. But financial planner Ed Rempel is concerned the couple may have underestimated expenses.
FAMILY FINANCE |
|
|
Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? If yes, drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a story about it (we’ll keep your name out of it, of course).
|
|
|
If the Liberals are serious about leadership, they must ditch the narrow corporate tax review and conduct broad-based tax reform, tax expert Kim Moody says. It’s time for big thinking: new and bold ideas to help kickstart our lagging economy and encourage our great entrepreneurs. TAX REFORM |
|
|
Asset managers are developing more of the once-exclusive offerings for a broader retail investor audience and Morgan Stanley & Co.’s North Haven Private Assets Fund will offer exposure to co-investments and secondaries in the lower middle market, the company says. LET THEM BUY PE
If you are, or know, a younger Canadian making extra money with a side hustle, write to us at wealth@postmedia.com for a possible profile.
|
|
|
Financial Post on YouTube |
Visit Financial Post's YouTube channel for interviews with Canada's leading experts in economics, investing and the stock markets, housing, the energy sector and more. |
|
|
|
