Category Archives: news

Canada’s stock market is outperforming year-to-date.  We have had a sector rotation to some extent in the market, where Canada is currently outperforming the U.S.  While most portfolios are weighted to Canada, the rotation primarily involves the materials sector, and specifically, precious metals like gold and silver producers.  Materials are up nearly 50% this year.  This can be seen in gold mining stocks. 

Gold trades inversely to the U.S. dollar and the spike over the last year or so, can be attributed in part, to weakness in the U.S. dollar.  It seems that a weaker U.S. dollar may be on the agenda for the Trump administration seeking to achieve an environment where U.S. products are more attractive and potentially as a means of dealing with U.S. debt.

Gold has limited industrial demand, and history suggests that a sharp volatile ride up has often been matched with the same volatility on the way down.  The precious metal is sometimes referred to as a fear commodity.

But that is not the only reason behind the TSX rise this year.  Technology is up 17% ytd and the Financials are up over 14% ytd.  The weak sector in the TSX is currently the Energy sector, as a result of current supply.  Energy demand continues to rise.

Here is a contrarian thought to keep in mind.  Despite the showing of the Canadian market year-to-date, Canada’s productivity and GDP remain rather low.   

Short-term volatility (last April) might be attributed to political or economic events near-term, but over the longer-term markets have risen due to economic fundamentals.  The most recent quarter’s earnings announcements provided evidence of that, and markets are at new highs. 

In the U.S. we wish to own companies least impacted by tariffs though, which to a large extent continues to have us favour innovative technology companies.

Some say we live in confusing times.  Come get untangled with a fresh perspective on Wednesday October 1^st when we will have our Chief Economist, Stefane Marion in Victoria for a presentation and Q&A.  This event is limited seating on a first come, first served basis. We will be sending out an official invitation tomorrow with specific details and where clients can register; if you need any assistance registering, be sure to give our office a call and we would be happy to assist.

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial.

Best,

National Bank Financial

Rob Hunter                                 Campbell Hunter

Senior Wealth Advisor                 Wealth Advisor CIM®

Sources: National Bank Research, National Bank Economics, Stockcharts.com

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF), and is a wholly owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

The opinions expressed herein do not necessarily reflect those of National Bank Financial. The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed consider a number of factors including our analysis and interpretation of these particulars, such as historical data, and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. Unit values and returns will fluctuate, and past performance is not necessarily indicative of future performance. Important information regarding a fund may be found in the prospectus. The investor should read it before investing.

The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. The opinions expressed do not necessarily reflect those of NBF.

The securities or sectors mentioned herein are not suitable for all types of investors. Please consult your Wealth Advisor to verify whether the securities or sectors suit your investor’s profile as well as to obtain complete information, including the main risk factors, regarding those securities or sectors.

Selling calls against stock (Covered Writing): Shares may need to be sold at the strike price of the option at any time prior to expiration. If the calls are assigned, further opportunity for appreciation in the underlying security above the strike price is foregone.

Risk/Reward of the strategy = Strike price minus the purchase price of the underlying plus the premium received from the sale of the call. The maximum loss is the same as holding a long position less the premium received.

The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario and Quebec.

National Bank Financial is a member of the Canadian Investor Protection Fund.

During the past few months, we observed market lows in April following the announcement of new tariffs by the U.S. administration. These threats of tariffs have often been delayed, and this pattern remains consistent.  While they are talked up, they have not all been implemented and corporate earnings have been strong, lifting both Canadian and U.S. markets to new highs. 

Should these tariffs be implemented at the level previously indicated, it is likely we will see an eventual impact on corporate earnings and a potential slowdown in economic activity. If not, we may continue to experience current market conditions, which have proven resilient. It seems the market is gradually adapting to policy rhetoric and reacting less strongly than it did earlier this year in April.

On the currency front, the U.S. dollar has been the weakest asset class year-to-date, while gold has been the strongest, benefitting from its inverse relationship with the U.S. dollar. There is ongoing speculation that the U.S. administration is seeking change at the Federal Reserve to encourage lower interest rates and in turn, an even weaker dollar as a means of making Americans buy American products which they may have little choice in doing as their dollar is weak to global currencies. 

Our approach remains focused on identifying and holding high-quality companies, navigating short-term noise with a long-term perspective. Return on invested capital (ROIC) remains a key metric in our portfolio decisions. To help offset currency risk, we are employing strategies such as selling options closer to the price at which stocks were purchased, thereby enhancing premiums as a partial hedge.

Despite currency fluctuations, we continue to see value in U.S. markets, given the concentration of leading global businesses. We remain vigilant and diversified, monitoring developments closely.

This commentary reflects my opinions alone and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial.

Best,

National Bank Financial

Rob Hunter                                 Campbell Hunter

Senior Wealth Advisor                 Wealth Advisor CIM®

Sources: 

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF), and is a wholly owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

The opinions expressed herein do not necessarily reflect those of National Bank Financial. The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed consider a number of factors including our analysis and interpretation of these particulars, such as historical data, and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. Unit values and returns will fluctuate, and past performance is not necessarily indicative of future performance. Important information regarding a fund may be found in the prospectus. The investor should read it before investing.

The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. The opinions expressed do not necessarily reflect those of NBF.

The securities or sectors mentioned herein are not suitable for all types of investors. Please consult your Wealth Advisor to verify whether the securities or sectors suit your investor’s profile as well as to obtain complete information, including the main risk factors, regarding those securities or sectors.

I have prepared this report to the best of my judgment and professional experience to give you my thoughts on various financial aspects and considerations. The opinions expressed represent solely my informed opinions and may not reflect the views of NBF.

Selling calls against stock (Covered Writing): Shares may need to be sold at the strike price of the option at any time prior to expiration. If the calls are assigned, further opportunity for appreciation in the underlying security above the strike price is foregone.

Risk/Reward of the strategy = Strike price minus the purchase price of the underlying plus the premium received from the sale of the call. The maximum loss is the same as holding a long position less the premium received.

The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario and Quebec.

National Bank Financial is a member of the Canadian Investor Protection Fund.

Strong earnings reporting helped markets recover from on again / off again tariff announcements by the current regime in the U.S.  That said a number of significant tariffs that were postponed until July 31^st may soon reappear.  Not a great time to be a customs broker.

Further, while earnings helped buoy the stock market near-term, the impact of tariffs will be better felt in coming quarters, particularly if heavier tariffs are applied. 

Here is how markets ended year-to-date after the first week of June…

TSX (Canadian broad market)                                         +6.88%

SPX (S&P 500 U.S. broad market)                                  +2.01%

Nasdaq (U.S. technology laden index)                           +1.13%

We’re pleased to announce that our Geopolitical Analyst – Angelo Katsoras will be joining us for a Geopolitical & Economic Outlook webinar on June 11th at 9am PST. This event is open to NBFWM Advisor teams and their clients.  Angelo will be sharing timely insights on the on the global and political landscape followed by a live Q&A where attendees can ask questions directly.

Registration emails were sent Thursday June 5^th.

Canadian Banks just reported earnings last week.

Four of the six banks raised their dividends (NA, RY, BMO, BNS).  Four have active share buyback programs in place (RY, BMO, CM, TD)

I believe National and Royal are best positioned for growth over the next few years as a result of recent acquisitions that they can grow from (HSBC for Royal and Canadian Western Bank for National).

While the bank values have appreciated over the long-term, let’s take a look at the difference between owning a bank and getting dividends versus being a depositor at a bank getting interest. 

We could do this exercise on any bank but for this illustration I will use National Bank (NA) and it’s chart over the last ten years.

Current dividend yield of 3.5% paid quarterly.                                                                                  5 year non-redeemable GIC 3.1%

Dividend gets dividend tax credit – taxed at your                                                                             Taxed at your highest marginal rate

lowest marginal tax rate

Banks have a strong history of dividend growth                                                                                         Deposit rates are fixed.

Today, NA pays $4.72 in annual dividends. An investor

who bought that stock ten years ago at say, $30 would

have dividend yield of 15.7% today.

Bank stocks have a strong history of capital growth                                                                              Deposits do not grow capital.

An investor who has held NA stock from $30 for the

last ten years to the current value of $133.80 has seen

growth of 346% or an average of 34.6% per annum.

Bank stocks are liquid.  They can be sold anytime.                                                            Deposits that are non-redeemable are just that.

Bank stocks are subject to volatility of markets.                                                                                               Deposits are not.

Finally, you may have become aware of recent news from the United States regarding the “big beautiful tax bill,” specifically section 899 of the tax bill. We would like to inform you that our firm is diligently working on both sides of the border to represent our clients’ best interests. We anticipate having more clarity on this matter and will share further information with you in due course.

At this time, we expect the impact of these changes to be minimal for our investors, who primarily focus on total returns and growth from their US equity exposure rather than simply dividends. Since we source minimal dividend income from US stocks, in relation to the Canadian side, even a worst-case scenario involving a 50 percent withholding tax on US dividends would have a negligible effect on the after-tax returns for our taxable Canadian clients.

In essence, the majority of our dividend income is derived from the Canadian side of your portfolio. Additionally, where we do not generate significant dividend income from the US portion of the portfolio, we will actively write calls to synthetically create the ‘dividend’ through call writing. It is important to note that the premiums (income) received from call writing are taxed as capital gains and would not be subject to the proposed new tax on US dividends. Please do not hesitate to reach out to Rob or Campbell if you wish to discuss further.

Best wishes for warm start to a great summer!

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial.

Best,

National Bank Financial

Rob Hunter                                 Campbell Hunter

Senior Wealth Advisor                 Wealth Advisor CIM®

Sources: Stockcharts.com, Reuters, National Bank

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF), and is a wholly owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

The opinions expressed herein do not necessarily reflect those of National Bank Financial. The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed consider a number of factors including our analysis and interpretation of these particulars, such as historical data, and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. Unit values and returns will fluctuate, and past performance is not necessarily indicative of future performance. Important information regarding a fund may be found in the prospectus. The investor should read it before investing.

The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. The opinions expressed do not necessarily reflect those of NBF.

The securities or sectors mentioned herein are not suitable for all types of investors. Please consult your Wealth Advisor to verify whether the securities or sectors suit your investor’s profile as well as to obtain complete information, including the main risk factors, regarding those securities or sectors.

I have prepared this report to the best of my judgment and professional experience to give you my thoughts on various financial aspects and considerations. The opinions expressed represent solely my informed opinions and may not reflect the views of NBF.

Selling calls against stock (Covered Writing): Shares may need to be sold at the strike price of the option at any time prior to expiration. If the calls are assigned, further opportunity for appreciation in the underlying security above the strike price is foregone.

Risk/Reward of the strategy = Strike price minus the purchase price of the underlying plus the premium received from the sale of the call. The maximum loss is the same as holding a long position less the premium received.

The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario and Quebec.

National Bank Financial is a member of the Canadian Investor Protection Fund.

Earlier this week the Trump administration in the United States surprised global markets with the implementation of reciprocal tariffs across the globe for all major trading partners. The level of tariffs which came, was a surprise to most financial markets for all countries involved.

Donald Trump’s tariffs are widely criticized by economists and market experts, with the Wall Street Journal calling it the “stupidest trade war ever.” The tariffs could also harm the Republican Party, as public opposition grows, and Trump’s economic approval ratings drop. There is a chance the GOP could lose the House in 2026, and despite pleas from Republicans, Trump made the tariffs tougher.

This tariff experiment will likely be remembered as an immense failure. American voters will likely be shocked by the impact of these policies on their daily lives and cost of living; tarnishing the reputation of trade protectionism for years to come.

All in all, we would expect that the announcements made two days ago will have some inflationary pressures and will have also some negative consequences for global growth.  

You will likely be hearing the term ‘stagflation’ in the media. I bring this up only because it may sound alarming, however it is actually quite normal for the circumstances.

Historical evidence suggests that tariffs tend to have a disinflationary effect over time, with a more significant impact on economic growth than on inflation in the long run. However, in the short term (such as a period of 6 to 12 months), tariffs can indeed exert inflationary pressures, affecting certain industries more than others. At this juncture, I should mention, you do not own cars, car parts, steel or aluminum production or potash in your portfolio which are all subject to recent tariffs.

So, what are the implications for you and your investment portfolio? We expect to see a lot of volatility over the coming days; however, we expect markets to settle as we get further through the month of April and details become a bit more well known.

I advise you to refrain from making any significant changes to your portfolio during this period of high volatility. Typically, this is a losing proposition, and such actions result in unfavorable outcomes. Turbulent markets can cause rapid fluctuations that affect investments both negatively and positively within a short timeframe.

If you have a history as an investor, you will know from past corrections, such as the 2008 financial crisis, the 2020 global pandemic, or more recently, the 2022 market correction, that all of these events had significant impacts on valuations near term but to a much lesser extent on the level of income generated by your portfolio.

Our team has taken time in the days and weeks leading up to these announcements to determine our market positioning and have discussed this with many of you. We have been writing calls to lock in premiums for additional income and downside protection, which smooth market fluctuations over time, and we are seeking opportunities where we could potentially be buyers where others are selling.

Additionally, we have been identifying where to allocate capital in industries and companies with a more stable earnings profile, stronger balance sheets, and returns on invested capital, as well as testing dividend expectations. These activities have been ongoing since the beginning of the year.

While this might be a volatile period in the short term; the important principle remains not to act in haste and to stick to our disciplines which have proved to be efficient and profitable for decades.

We will be working to provide you with the best picture of what’s to come, not for the coming weeks, but for the coming year or two. By extending our view beyond the immediate, we can make more informed decisions, provide more efficient and optimal outcomes for your portfolio, and as always, staying true to what your portfolio goals are.

2024 tax returns must be filed by April 30^th.

Enjoy the spring weather.

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial.

Best,

National Bank Financial

Rob Hunter                                 Campbell Hunter

Senior Wealth Advisor                 Wealth Advisor CIM®

Sources: Reuters, AGF, Fidelity, The Wall Street Journal

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF), and is a wholly owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

The opinions expressed herein do not necessarily reflect those of National Bank Financial. The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed consider a number of factors including our analysis and interpretation of these particulars, such as historical data, and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. Unit values and returns will fluctuate, and past performance is not necessarily indicative of future performance. Important information regarding a fund may be found in the prospectus. The investor should read it before investing.

The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. The opinions expressed do not necessarily reflect those of NBF.

The securities or sectors mentioned herein are not suitable for all types of investors. Please consult your Wealth Advisor to verify whether the securities or sectors suit your investor’s profile as well as to obtain complete information, including the main risk factors, regarding those securities or sectors.

I have prepared this report to the best of my judgment and professional experience to give you my thoughts on various financial aspects and considerations. The opinions expressed represent solely my informed opinions and may not reflect the views of NBF.

Selling calls against stock (Covered Writing): Shares may need to be sold at the strike price of the option at any time prior to expiration. If the calls are assigned, further opportunity for appreciation in the underlying security above the strike price is foregone.

Risk/Reward of the strategy = Strike price minus the purchase price of the underlying plus the premium received from the sale of the call. The maximum loss is the same as holding a long position less the premium received.

The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario and Quebec.

National Bank Financial is a member of the Canadian Investor Protection Fund.

This quarter’s earnings season is nearly complete with the banks’ reporting. The U.S. banks have shown a positive outlook for 2025, with strong results relative to expectations. The S&P 500 companies are reporting higher earnings for the fourth quarter, with 76% of companies reporting actual EPS above estimates. The blended earnings growth rate for the fourth quarter is 16.9%, marking the highest year-over-year earnings growth rate since Q4 2021.

As you are likely aware, the U.S. has announced a 25% tariff on all Canadian products exported to its territory, along with a specific 10% tariff on the energy sector, effective March 4, 2025.  This move has been justified by the U.S. administration for reasons of national security and the protection of domestic industries. In response, Canada has imposed 25% tariffs on $30 billion of imports from the U.S., effective February 4, 2025, with an additional $125 billion to follow.

A month ago, the discussion was about whether the tariffs would actually occur, where now they tend to be about how long they might last.  The economic impact on Canada will be significant, with an estimated 2.5   percentage point hit to GDP over the next year and a 1 percentage point increase in inflation if they stick.  That said, the Bank of Canada is expected to focus on stabilizing growth at the expense of higher inflation from tariffs on Canada (lowering interest rates).

While markets remain positive year-to-date, they have been choppy since January 20^th. When the world is in a constant state of reacting to a deluge of (negative) news feeds and gross uncertainty we must look in the mirror and remember what we are doing and why.

Two things came to mind. The first is that we strive to invest in what will be true beyond today’s politics and scalding rhetoric. Experience and history have taught us to invest through tumultuous times tactfully and to participate in resilient businesses that will continue to be productive and relevant regardless of the current news cycle. The second thing that comes to mind is the ‘fallacy or seduction of pessimism’, where a pessimist will often sound like someone who has your best interests in mind, yet an optimist can often sound aloof or akin to lofty salesmanship.

 “Save like a pessimist and invest like an optimist” *

Stay the course.

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial.

Best,

National Bank Financial

Rob Hunter                                        Campbell Hunter, CIM®

Senior Wealth Advisor                      Wealth Advisor

Sources: Reuters, *Morgan Housel

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF), and is a wholly owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

The opinions expressed herein do not necessarily reflect those of National Bank Financial. The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed consider a number of factors including our analysis and interpretation of these particulars, such as historical data, and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. Unit values and returns will fluctuate, and past performance is not necessarily indicative of future performance. Important information regarding a fund may be found in the prospectus. The investor should read it before investing.

The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. The opinions expressed do not necessarily reflect those of NBF.

The securities or sectors mentioned herein are not suitable for all types of investors. Please consult your Wealth Advisor to verify whether the securities or sectors suit your investor’s profile as well as to obtain complete information, including the main risk factors, regarding those securities or sectors.

I have prepared this report to the best of my judgment and professional experience to give you my thoughts on various financial aspects and considerations. The opinions expressed represent solely my informed opinions and may not reflect the views of NBF.

Selling calls against stock (Covered Writing): Shares may need to be sold at the strike price of the option at any time prior to expiration. If the calls are assigned, further opportunity for appreciation in the underlying security above the strike price is foregone.

Risk/Reward of the strategy = Strike price minus the purchase price of the underlying plus the premium received from the sale of the call. The maximum loss is the same as holding a long position less the premium received.

The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario and Quebec.

National Bank Financial is a member of the Canadian Investor Protection Fund.