The impact of the US trade war will be front and center this week as earnings season kicks off with a number of companies reporting their quarterly earnings, including Tesla and Alphabet. While we do not necessarily believe that earnings will have been impacted this early from the implementation of US tariffs around the world (we believe the impact is more likely to come in Q3 or Q4), we do believe that the forward guidance will dictate the shorter-term performance of large mega-cap companies like the Magnificent Seven (Apple, Microsoft, Tesla, Nvidia). They are likely to take a conservative approach on their forward earnings, knowing there remains a significant amount of uncertainty with regards to tariffs. Companies will have some headwinds ahead, especially if they have a large focus of their business or manufacturing with China.

 

All this uncertainty has driven the continued rise of gold prices. But why is gold seen as a safe haven during periods of volatility in the stock markets? A few reasons:

 

  1. Gold has low or negative correlation to stocks- when equities decline, gold often holds its value or even appreciates, making it an effective diversifier and risk offset in investment portfolios.
  2. Historical performance in crises- during major financial events i.e. 2008 global financial crisis, gold prices rose while the stock indices declined. This pattern has reinforced gold’s reputation as a store of value in turbulent times.
  3. Intrinsic value and independence from issuers- Gold is not tied to the solvency or performance of any company, government, or financial institution. Unlike stocks/bonds, gold carries no default risk, and its value is not eroded by corporate bankruptcies or government debt crises.
  4. Monetary asset status- Gold is held by central banks as a reserve asset, highlighting its role as a form of “real money” that retains value regardless of monetary policy or currency devaluation. 
  5. Inflation hedge- Gold is often seen as a hedge against inflation, preserving purchasing power when fiat currencies lose value due to rising prices or aggressive monetary expansion. This further increases its appeal during times when confidence in traditional financial assets wanes.
  6. Psychological and Historical Factors- Gold has a centuries-long history as a store of wealth, which bolsters investor confidence during uncertain times. Its enduring value and universal acceptance make it a go-to asset when fear and uncertainty drive markets.

 

The deadline for filling your 2024 taxes is fast approaching. Many Canadians are unaware that unused tax credits from prior years are still available. We have an insightful article that could help you!

 

The Bank of Canada held its current interest rate last week, in a move that was widely predicted. We have an article that breaks down why the BOC did not move ahead in lowering its key rate. Check it out!

 

There has been increased discussion about AI Supercomputers and the race to boost operations in the US. What is an AI supercomputer and why has there been an increased focus on it? We have an interesting article that helps to explain it all.

 

YouTube is about to turn twenty! This phenomenon has continued to expand to the point where many people use it as their primary source of entertainment (cable be damned)! This excellent article reveals what YouTube has done for us, and to us. Have a read!

 

We have some excellent travel destinations for Canadians if the loonie is low. Enjoy!

 

Remember: April 28th is election day. Please make sure that you take the time out of your busy schedule to go and vote if you have not done so yet by mail or at the advanced polling stations!

 

Have a wonderful week everyone!

 

 
Do you need some additional information to help you choose how you are going to vote in the upcoming federal election? We have an article that provides what each of the three major parties is bringing to the table from a topic of finances. This is an important read!