Daily Commentary

MarketMinder’s View: The University of Michigan’s Survey of Consumers hit a preliminary 48.2 in May, below analysts’ expectations and down -3.2% from April’s reading. As the title suggests, gas prices’ recent rise was a key point of worry, with one-third of respondents mentioning prices at the pump. Interestingly, this gloomier reading occurred alongside a rising stock market, solid economic data and continued rumblings of a diplomatic end to the war, suggesting sentiment is slow to catch up. That isn’t terribly surprising, especially when you consider the war’s most obvious effect on everyday life, higher gasoline prices, persists. To us, it is all another batch of evidence showing consumer sentiment reflects headlines and how people feel in a moment, usually influenced by the very recent past. It isn’t predictive, telling you little about how people will actually behave. The last few years’ economic and consumption growth alongside historically weak sentiment reads shows you that in action.

MarketMinder’s View: Here is something worth watching: “In a 2-1 ruling, the panel of judges at the US Court of International Trade found the [Trump] administration lacked the justification to enact tariffs under a 1974 trade law known as Section 122. The administration began to enact these tariffs after a Supreme Court ruling earlier this year rendered its most sweeping levies illegal.” The court ruled US trade officials must stop collecting tariffs from the case’s plaintiffs and refund their prior payments, but perhaps that will be stayed during the appeals process as the ruling against the Liberation Day tariffs was. Either way, we doubt it makes much difference, and as with the prior ruling, it doesn’t mean tariffs are going away. These tariffs were already set to expire July 24 absent Congress authorizing an extension, and the administration was already working on replacement tariffs via other, more established (and legally tested) means. So if you are the importer of record for any goods subject to these tariffs, just consider this an FYI that you may eventually be able to claim a refund if the ruling is upheld and extended broadly. But that is about the only significance here. More broadly, markets simply haven’t reacted much to “big” tariff news since Liberation Day. These days, they know the global economy can adapt to tariffs’ added costs complications. Q1 GDP confirmed as much, showing imports bouncing as stockpiles ran low and businesses unleashed pent-up demand. So while we still think tariffs are economic negatives, stocks and the economy seem over them.

MarketMinder’s View: It has been a tough 2026 for Canada’s labor market, and last month was no different. “Employment fell by 17,700 in April while more people looked for work, pushing the unemployment rate up to 6.9%. Economists surveyed by Bloomberg were expecting an increase of 10,000 jobs and for the jobless rate to hold steady at 6.7%.” Not great, but not groundbreaking for markets, either. April’s report marks Canada’s third monthly employment loss this year and the fifth since President Trump’s Liberation Day tariff announcement raised uncertainty for businesses in the Great White North—particularly those that export steel, aluminum and autos over the southern border, given Trump’s sector-specific levies in these areas. But employment data are also very late-lagging, sapping their market influence. They reflect months-old business conditions since employers tend to wait until the last possible minute to hire or fire. Thus, a shrinking job market doesn’t surprise when you consider Canadian GDP contracted in Q2 and Q4 2025. Preliminary data indicate GDP rebounded in Q1, so don’t be surprised if employment improves, too, at a lag. But stocks look at factors 3 – 30 months ahead, rendering April’s employment data old news. Canadian stocks are having a fine year despite the volatility tied to the Iran war and shuttered Strait of Hormuz, suggesting they aren’t hung up on last year’s economic wobbles.