Daily market snapshot

Published June 16, 2025
 Woman on couch looking at laptop

Monday, 06/16/2025 p.m.

  • Equity markets stabilize on Monday – North American equity markets traded higher on Monday, with markets stabilizing after a volatile trading session on Friday that saw the S&P 500 decline by over 1% and oil spike by more than 7%, following escalating geopolitical tension between Israel and Iran. While the human element of the conflict should not be dismissed, markets stabilized on Monday, with reports suggesting that there has been limited disruption thus far to the global energy supply chain.* Growth segments of the market were among the top performers, with the technology, consumer discretionary and communication services sectors of the S&P 500 all gaining over 1%.* Bond yields finished slightly higher, with the 10-year GoC yield finishing the day around 3.4% and the 10-year U.S. Treasury yield climbing to 4.46%.* 
     
  • U.S. consumer-spending trends and Fed decision in focus to begin the week – U.S. household spending and monetary policy will be front and centre for investors this week, with U.S. retail sales for May out tomorrow and the June FOMC meeting concluding on Wednesday. On the consumer side, expectations are for headline retail sales to post a modest decline in May, while control-group sales, which exclude spending on more volatile categories, such as building materials, gasoline stations and motor vehicles, are expected to post a 0.2% gain.* U.S. consumer spending has continued to expand in 2025, albeit at a slower rate than in previous years, with real personal consumption expenditure growing by 1.2% annualized in the first quarter.* We expect healthy U.S. labour-market conditions and household balance sheets to help support consumer spending throughout 2025. On the monetary-policy side, expectations are for the Fed to hold its policy rate steady on Wednesday.* In addition to the decision on interest rates, Wednesday's meeting will also provide an updated set of economic projections, with investors likely watching to see whether expectations for rate cuts have changed since the March meeting, which signaled two quarter-point cuts from current levels in 2025.** Our base-case scenario remains that the Fed will cut interest rates one to two times in the second half of 2025, which should help provide moderate support to economic growth through lower borrowing costs, in our view. 
     
  • Performance check-in – While 2025 has had its fair share of volatile markets, most asset classes are higher as we near the halfway point for the year. Despite falling by 13% from January 30 to April 8, the S&P/TSX Composite has gained 8.5% including dividends in 2025.* At a sector level, the materials sector has been the top performer, gaining more than 30%; however, nine of the 11 sectors of the TSX are positive year-to-date.* In the U.S., the S&P 500 is higher by roughly 2% year-to-date in U.S. dollar terms, reversing losses from earlier this year.* Looking outside of North America, equity-market performance has been strong, with overseas developed large-cap stocks higher by roughly 11% and emerging-market stocks up by roughly 6%.* In our view, fiscal stimulus measures in the eurozone have helped support sentiment in overseas developed large-cap stocks, while strong performance in Chinese technology companies has helped provide a boost to emerging-market stocks*. Despite recent underperformance, we believe opportunities remain most attractive in U.S. equities relative to overseas and Canadian equities over a one- to three-year time horizon, and we recommend investors consider overweighting U.S. stocks as part of our opportunistic asset-allocation guidance.

Brock Weimer, CFA
Investment Strategy

*FactSet **March FOMC Summary of Economic Projections
Overseas developed large-cap stocks represented by MSCI EAFE. Total return in CAD.
Emerging-market stocks represented by MSCI EM. Total return in CAD. 

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Important Information:

This is for informational purposes only and should not be interpreted as specific investment advice. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice.

Investors should understand the risks involved in owning investments, including interest rate risk, credit risk and market risk. The value of investments fluctuates and investors can lose some or all of their principal.

Past performance does not guarantee future results.

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