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Daily market snapshot

Published May 28, 2025
 Woman on couch looking at laptop

Wednesday, 05/28/2025 p.m.

  • Stocks finish mixed ahead of NVIDIA earnings – Canadian stocks were flat while U.S. equity markets closed lower on Wednesday, with investors awaiting earnings results from tech-giant NVIDIA after the market close. Canadian corporate earnings were in focus as well, with Bank of Montreal and National Bank of Canada reporting this morning and both posting better-than-expected earnings and sales for the quarter. From a leadership perspective, all 11 sectors of the S&P 500 finished lower, with growth-style sectors, such as technology and communication services, faring better than value-style sectors, such utilities and energy.* Bond yields were mixed, with the 10-year GoC yield flat at 3.24% and the 10-year U.S. Treasury yield climbing to 4.48%.*
     
  • Speech from the throne highlights several key economic initiatives – Yesterday, His Majesty King Charles III delivered a throne speech describing the government ambition as the largest transition in the Canadian economy since the Second World War. In the speech King Charles III emphasized Canada's sovereignty and independence and outlined the Liberal government's priorities. Among them include:
     

    • Deliver a middle-class tax cut - The government says this will provide tax relief for nearly 22 million Canadians and save families up to $840 a year. The proposed legislation would reduce the lowest Federal income tax bracket from 15% to 14%, and the government says it will table the specific legislation in the coming weeks;**
       
    • GST relief for first-time homebuyers – The proposal aims to eliminate the Goods and Services Tax (GST) for first-time homebuyers on new homes valued up to $1 million, saving them up to $50,000, and lower the GST for first-time homebuyers on new homes valued between $1 million and $1.5 million. Homes purchased on or after May 27, 2025, would be eligible if all other eligibility criteria are met;** and
       
    • Eliminate internal trade barriers – The Liberals intend to introduce legislation by Canada Day that would remove federal internal trade barriers to boost economic efficiency across provinces and territories.**
        

    In our view, the proposed measures should help provide a positive, albeit modest, boost to economic activity. Lower income-tax rates and GST relief for first-time homebuyers could help support consumer spending, while the removal of interprovincial trade barriers could help improve domestic economic efficiency. However, we still expect trade-policy uncertainty to weigh on domestic economic activity in 2025, with real GDP likely to slow from last year's 1.5% gain.*
     

  • All eyes on NVIDIA results as first-quarter earnings season winds down – Earnings results from technology-giant NVIDIA will be in focus for investors, with the company scheduled to report results after the market close today. Analysts expect NVIDIA to post earnings per share of $0.73, which, if achieved, would represent earnings growth of roughly 20% compared with the same period a year ago.* On the Canadian side, Bank of Montreal and National Bank of Canada reported this morning, both posting better-than-expected earnings and sales.* At an index level, earnings growth has been strong in the first quarter, with TSX earnings per share on pace to grow by roughly 12% and S&P 500 earnings per share on pace to grow by roughly 13%.* While earnings estimates have been revised lower in the remaining quarters of 2025, expectations are still for the TSX to achieve earnings growth of 8% in 2025 and S&P 500 to grow earnings by 9%.* In our view, single-digit earnings growth is achievable this year, particularly as trade tensions have de-escalated more recently.
     

Brock Weimer, CFA
Investment Strategy

Michael Lawrence, CFA, CFP®
Client Needs Canada - Strategist

Source: *FactSet **Department of Finance Canada 

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