Good morning. Investors are scrambling to keep up with Trump-fuelled market swings – more on the below, along with Ontario’s controversial Bill 5 and the Bank of Canada’s rate hold. But first:
Today’s headlines
- Carney faces pressure to retaliate against Trump’s steel and aluminum tariffs
- Canada’s Strong Borders Act would give law enforcement access to internet subscriber information without a warrant
- The Oilers thrill the home crowd with a comeback win in Game 1 of the Stanley Cup Final
Illustration by Pei Yuan Li
Personal finance
A market survival kit
The world can’t predict where Donald Trump will ratchet up his trade war – maybe at a Pittsburgh steel plant, maybe in an early-hours social-media post – but Wall Street has figured out how to profit off his clockwork retreat as soon as markets tumble. It’s a tasty spin on buying low called the TACO trade, short for Trump Always Chickens Out. Investors cash in once stocks rebound after Trump walks back his tariff threats.
But you might not have the stomach for this sort of trading. You might, correctly, prefer to spend less of your time glued to a Truth Social feed. So The Globe’s crack team of business reporters put together a guide to Trump-proofing your wallet, full of expert advice for managing your portfolios, household finances and lives. They’ve answered 42 pressing questions that Globe readers have asked again and again (and again). Here’s a start on how you can best weather the White House storm.
Should I sell my U.S. stocks?
You can certainly try, but it’s hard to maintain a diversified portfolio if you ditch U.S. stocks, which represent nearly three-quarters of all shares on the MSCI World index. (That’s up from 48 per cent in 2010.) Then there’s the whole capital-gains issue. After piling into the bull market in U.S. equities over the past few years, lots of Canadian investors have amassed big gains on paper. Unloading them now could result in a hefty tax bill.
If you’d still like to look abroad, European stocks are shaping up to be the hot trade of 2025. Europe has benefited from investment dollars fleeing the instability of U.S. markets, and it’s poised for better economic growth as countries – in particular Germany – ramp up spending. Another bonus: European stocks are cheap compared with their U.S. counterparts.
But if you want to buy Canadian, the energy and natural resources sectors may be a good bet, including major players such as Enbridge, Agnico Eagle, Teck Resources and Suncor. Several money managers told The Globe that companies like Roots, Canadian Tire and Aritzia could also get a boost as customers shift spending away from U.S. chains. Plus, Canadian Tire just became the new destination for Hudson’s Bay stripes.
Should I buy bonds?
Absolutely. They’re not as volatile as the stock market, offering stability to balanced portfolios, and they provide a kind of insurance against an economic downturn. That’s because central banks tend to cut interest rates when growth is threatened, and lower rates can send bond prices higher. If you want to play it super safe, opt for bonds backed by national, provincial or municipal governments.
A Kazakh gold smelter in an aluminized suit.Pavel Mikheyev/Reuters
Should I buy gold?
Ideally, you would’ve done that 20 months ago, when high U.S. interest rates and geopolitical tensions prompted investors to start getting bullish on bullion. Since then, the price of gold has risen 78 per cent, outperforming the S&P 500 by about 36 percentage points (and that’s including dividends).
But some observers think there’s still room to grow. Trump’s erratic policies are raising inflationary pressures, dragging down the U.S. dollar, and confusing the global economic outlook – all of which could be good for gold.
Screw it: Should I buy crypto?
No.
Okay, look: Trump campaigned on a promise to make America “the crypto capital of the world,” and bitcoin soared to a record high when he took office in January. That same month, he also launched his own meme coin, $TRUMP. But while cryptocurrency has lined Trump’s personal pockets – according to the Washington Post, his businesses have made around US$312-million in crypto sales and US$43-million in fees – the industry remains hugely volatile, plummeting, rallying, then dipping again. The Globe has interviewed many experts over many years about this subject, and their advice is usually the same: If you want to invest in crypto, do it with money you can stand to lose.
The Shot
‘Moscow is already preparing for its next move’
A mural in Kyiv of Vasyl Malyuk, the head of Ukraine's Security Service, who led Sunday's drone strikes on Russia.Efrem Lukatsky/The Associated Press
At a meeting in Brussels yesterday, the U.S. ambassador to NATO was adamant that member countries commit 5 per cent of their GDP to defence to outpace the Kremlin’s military spending. Meanwhile, after a lengthy phone call with Vladimir Putin, Donald Trump warned that Russia planned to retaliate against Ukraine for its successful drone attack.
The Wrap
What else we’re following
At home: For the second consecutive time, the Bank of Canada held its interest rate steady at 2.75 per cent.
Abroad: After Israeli forces opened fire at food sites for three straight days, killing at least 61 Palestinians, the U.S.-backed Gaza Humanitarian Foundation gave out no aid yesterday.
In Ontario: Despite fervent opposition from First Nations and environmental groups, Doug Ford’s government gave itself sweeping powers to fast-track development.
Also in Ontario: A lawsuit accuses Popeyes of buying rotten chicken from an unauthorized seller operating out of a residential garage.