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Weekly Wrap

Markets were generally soft this week, although there was a little bit more AI euphoria to help soften the blow as Nvidia shares moved up another 5% this week. Canadian stocks are off 1% as gold prices fell 4%, further casting doubt on gold’s role as a safe haven these days. US stocks were up 0.5% as Trump and Xi sit down to talk trade (and flex on each other). Oil prices jumped 10% as investor optimism about a solution to the Strait of Hormuz fades. And with the International markets being more dependent of the Strait for their energy needs, the EU and Emerging Markets suffered with 2% and 2.5% drops this week, respectively. Higher oil and high US inflation data conspired to push interest rates up again, sending yields higher by about 0.2% in the medium to long-term end of the curve (5-10 years). The Loonie continues to be untethered to the price of oil as our dollar fell 0.5% this week against the US Dollar.

Market Insights

Kevin Warsh Confirmed as Federal Reserve Chair. The Senate confirmed Kevin Warsh as Federal Reserve chair by a 54-45 margin, the smallest ever for a head of the central bank as politics has entered the fray in yet another aspect of US life. All but one Democrat voted against Warsh's confirmation, while one Democrat did not vote. The vote reflected concern that Warsh may respond to President Donald Trump’s desire for lower rates rather than guard the Fed’s long-standing independence. Warsh will replace Jerome Powell, whose term as chair ends Friday, at a time when inflation is reaccelerating thanks to a resilient economy and higher oil prices from the war in Iran. Warsh previously served as Fed governor during the financial crisis and is known for his hawkish views on inflation (he, quite rightly, felt Powell was too slow to hike rates when inflation spiked in 2021-22). He was also openly critical of the level of stimulus provided to the economy over the pandemic, presciently worrying about inflation risks. RBC maintains their forecast that the Fed will remain on hold through 2026 and 2027, with risks skewed toward hikes. Meanwhile, inflation data got worse this week as the US annual inflation rate hit its highest level in three years. The consumer price index reached 3.8% in April, and it wasn’t just triggered by spiking oil prices in the wake of the Middle East conflict. On a month-to-month basis, April prices rose 0.6% from March as gasoline prices rose 5.4%, groceries were up 0.7%, and shelter costs grew 0.6% month-on-month. Overall, inflation outstripped wage growth for the first time in three years.

Canada Plans Large-Scale Expansion of Electricity Generation. On Thursday, Prime Minister Mark Carney launched a strategy to double Canada’s electricity generation by 2050, with consultations with various stakeholders over the next few months. The announcement positioned expanded power supply as central to affordability, energy security, and meeting accelerating demand. The plan includes adjusting clean electricity rules introduced under Justin Trudeau, giving existing natural gas generators more flexibility to operate under relaxed emissions standards, including the ability to use carbon offsets to meet targets rather than phasing them out as originally intended. The policy shift is also part of a broader reset in federal-provincial climate relations, especially with Alberta. Carney has moved away from several Trudeau-era measures, including the consumer carbon price and the oil and gas emissions cap, and has instead pursued a potential agreement involving federal support for a new oil pipeline, carbon capture, and changes to Alberta’s industrial carbon price. Negotiations remain ongoing, with an announcement from Carney and Alberta's Premier Danielle Smith expected today. Supporters may see the approach as more practical for investment and provincial cooperation, while critics may view it as weakening Canada’s emissions framework. Canada’s current 2030 target is to cut greenhouse gas emissions by 40% to 45% below 2005 levels, but Carney did not confirm whether that target will remain unchanged.

Portfolio Update

This week we continued to lay low with portfolios. We remain very comfortable with our positioning as markets remain highly valued in spite of rising inflation, average economic data and the world remaining on tenterhooks for what will happen next on a number of geopolitical fronts. The fine art of doing nothing may serve us well for the next few quarters. We suspect that the overwhelmingly bullish mood of investors combined with the institutional imperative to keep up on quarterly performance metrics is leading investors to sacrifice proper risk management as they chase returns for the sake of looking good in the short term. Despite our much more risk averse approach to portfolios in 2026 we have not had to sacrifice returns and if we do get an underperforming market we firmly believe our positioning will hold value much better than most strategies. Anyway…I gotta get back to doing more of nothing…

Planning On

Advances in healthcare and lifestyle science are making lifespans of more than 100 years an increasingly attainable reality rather than a distant aspiration. According to StatsCan, Canada’s population of around 12,000 centenarians or people over 100 has more than tripled in the last 20 years. And thanks to advancements in healthcare and medicine, that number could reach over 100,000 by 2073. Join RBC’s Leanne Kaufman and Dr. Angela Roberts (PhD, research associate, Western University’s Canadian Centre for Activity and Aging, as they discuss superagers – defining who they are and how they live.

Matters Beyond Wealth: Episode 71

This information is not intended to provide legal, tax, or insurance advice. To ensure that your own circumstances have been properly considered and that action is taken based on the latest information available, you should obtain professional advice from a qualified lawyer or accountant, as applicable, before acting on any of the information.

Charts of the Week

Spare Time Updates

Day-uses passes required soon at these three provincial parks

Planning a hike this summer? Remember day-use passes will be required for Joffre Lakes, Golden Ears and Garibaldi parks.

Weight loss: 8,500 steps daily may help maintain results after dieting

Scientists found that participants who followed a lifestyle modification program and increased their daily steps to about 8,454 by the end of the weight loss journey lost an average of 4.39% of their starting weight. Those same participants, when continuing to get in about 8,241 steps a day, were able to keep off an average of 3.28% of the weight they had lost.

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