Lexicon Financial Group Weekly Update — April 30, 2025
“Headlines, in a way, are what mislead you because bad news is a headline, and gradual improvement is not.”
From the desk of Craig Swistun, CIM, MFA-P, Portfolio Manager, Raymond James Investment Counsel, and Wayne Hendry, Client Relationship Manager, Raymond James Investment Counsel
Looking Around
Thanks to computers, smartphones, and tablets, we are living in the Information Age. We’ve been living it for some time, but the changes it has made on our daily lives are something that many of us take for granted. That’s the funny thing about long-term changes – they happen in a series of short-term adjustments, often so small we fail to notice them.
The beginnings of this Information Age (also known as the Computer Age, the Digital Age and the New Media Age) can be traced to American mathematician, Claude E. Shannon. In 1948, at age 32 and as a researcher at Nokia Bell Laboratories, he published a landmark paper that proposed that information can be quantitatively encoded as a series of ones and zeroes. He also showed that all information media, from telephone signals to radio waves to television, could be transmitted without error using this single framework. This is why he is known today as the "father of Information Theory."
By the 1970s, the Information (or Digital) Revolution was moving ahead, with the development of the Internet by the United States Department of Defense. More technological changes, including the development of fiber optic cables and faster microprocessors, accelerated the transmission and processing of information. The World Wide Web also grew into an interactive consumer exchange for goods and information while electronic mail or email, which permitted near-instant exchange of information, was widely adopted as the primary platform for workplace and personal communications. (1)
American stand-up comedian and actor, Tracy Morgan, once said that bad news travels at the speed of light while good news travels like molasses. Looking around the world, this seems to ring true. The wars in Ukraine and Gaza continue, globally, democracy appears to be under threat, and there is growing social and economic upheaval arising from the on and off again implentation of U.S. tariffs, etc. That said, the world, however, is better today than in the past. This is backed up by the improvement of basic measures of human well-being, including lifespan and infant and child mortality. For most of human history, life for the ordinary person was hard, brutal and short. Even as late as 1900, the average newborn child lived only to the age of 32. This figure is about 73 years now - the lifespan of a human being has doubled. Even in Africa, the world’s poorest continent, life expectancy at birth has risen from 50 to 64 since 1994.
The supply of food has increased, with better seeds, irrigation, fertilizers and pesticides; crop yields keep improving to keep up with global population increase. The average daily supply of calories for a human has grown to nearly 3,000, up from 2,600 in 1994 and 2,200 in 1961. In 1994, 18.6 per cent of the world population was undernourished. By 2020, it had dropped to 8.9 per cent.The incidence of child stunting and child wasting – chilling terms that describe the effect of hunger on the height and weight of young children – has plummeted in poor countries.
But to people living in 1961, it was difficult to envision what the world would look like in five years, let alone 56 years.
Despite predictions that the Earth’s natural resources would soon be drained, many of the world’s most essential minerals, from copper to zinc, nickel to lithium, remain plentiful. Oil reserves have increased to 1.7 trillion barrels from 1 trillion in 1994, due to the discovery of new oilfields, especially offshore, and new extraction methods like fracking and horizontal drilling, global oil. (2)
When astronaut Neil Armstrong declared that he took “one small step for man, one giant leap for mankind,” he failed to realise that we experience progress in inches. Often, it’s only when we look back that we actually realise how far we have come.
There are certainly challenges in the world today. Perhaps there will always be challenges. But, some of the dire issues we faced in decades past are barely mentioned anymore. Remember acid rain? The depletion of the ozone layer? Humans are ingenious, and have a way of solving big problems. Even if, in the moment, they look insurmountable.
But what does this have to do with investing?
Experienced investors have come to realise that what, in the moment, seems like an existential crisis – “it’s different this time” – will pass, because markets, like societies, adjust and adapt. They adapted to the financial collapse in 2008, and Black Monday, and two World Wars. They’ll survive tariffs, and conflicts in Gaza and Ukraine. Some days, though, it doesn’t feel like it.
If you’re feeling anxious about the markets or the composition of your portfolio, please give us a call. It’s what we’re here for.
Read and Watch
Want deeper insight into topics in your Weekly Update? Then, read and/or right click:
TSX returns to positive territory for 2025 as Canada votes
Video: U.S. markets at important resistance level
Europe Tried to Trump-Proof Itself. Now It’s Crafting a Plan B.
Japan introduces urgent economic measures to ease pain from US tariffs
Looking Back
Major stock markets in Canada and the United States ended last week on a positive note as investors analysed a spate of corporate earnings and looked for signs of easing tensions in the U.S.-China trade dispute. The Toronto Stock Exchange’s S&P/TSX Composite Index (TSX) ended marginally down last Friday after posting a three-week high on Thursday but finished the week up 2.1 per cent – its third weekly advance. The materials sector, which includes metal mining shares, has been the strongest performing sector on the TSX this year and is up more than 20 per cent as safe-haven demand propelled the price of gold to a record high. (3)
U.S. stock markets advanced last week supported by several reports indicating that the ongoing trade tensions between the U.S. and China could be de-escalating. Adding to this was speculation around potential near-term agreements between the U.S. and several other trading partners and comments from President Donald Trump that appeared to walk back his recent threat to fire Federal Reserve (Fed) Chair Jerome Powell.
Source: Bloomberg
The Nasdaq Composite was the leader in returns, while small- and mid-cap equities posted gains for the third consecutive week. Some better-than-expected corporate earnings releases during last week also seemed to drive positive investor sentiment. According to data from FactSet, 73 per cent of the companies that had reported first-quarter results through last Friday morning had beaten consensus earnings expectations.
However, S&P Global reported its Flash Purchasing Managers’ Index (PMI) survey data for April last week, which indicated that U.S. business activity growth had slowed to the lowest level in 16 months. While activity in the manufacturing space unexpectedly increased, services activity growth slowed sharply, dragging the overall index down to 51.2 from 53.5 in the prior month. Readings above 50 indicate expansion, while readings below 50 signal contraction.
Prices charged for goods and services increased at the fastest rate in over a year, with much of the increase attributed to the impact of tariffs. Expectations for the year fell to the lowest level since July 2022, although the decline in optimism was less pronounced in the manufacturing sector amid “hopes of positive impacts from government policies.” U.S. consumer sentiment fell in, for the fourth straight month. According to Surveys of Consumers Director Joanne Hsu, expectations have fallen a precipitous 32 per cent since January - the steepest three-month percentage decline seen since the 1990 recession - with consumers naming ongoing uncertainty around trade policy and the potential for a resurgence of inflation as areas of concern. Expectations for inflation for this year have shot up to 6.5 per cent, up from 5 per cent in March and the highest reading since 1981.
All major European stock markets ended last week higher after President Trump signaled that he is willing to reduce trade tensions with China and retracted his threats to fire Federal Reserve Chair Jerome Powell.
Japan’s stock markets rose last week as investor sentiment was supported by tentative signs of easing in global trade tensions. Although bilateral trade discussions between Japan and the U.S. are ongoing, Japan’s government announced a package of emergency economic relief measures—including support for corporate financing and steps to stimulate consumption—to ease the impact of the higher U.S. tariffs on Japan’s economy. Japan has been pushing for the U.S. to review its trade policy but, to date, has not received any exemptions as yet.
Mainland Chinese stock markets also advanced last week amid expectations that the Chinese government will roll out more stimulus to cushion China’s economy from the impact of U.S. tariffs. On Friday, China’s Politburo—the ruling Communist Party’s 24-member executive policymaking body—said it would “fully prepare” emergency plans in response to external shocks. China aims to set up new monetary tools and policy financing instruments to boost technology, consumption, and trade. The readout from the Politburo, which is led by Chinese President Xi Jinping, indicated that China is taking a patient approach toward supporting the economy amid the U.S. trade war. Although a trade war with the U.S. would likely deliver a shock to Chinese exports and economic confidence, it is anticipated that China’s government should have the financial capacity to reduce their impact. (4)
The opinions expressed are those of Craig Swistun and not necessarily those of Raymond James Investment Counsel which is a subsidiary of Raymond James Ltd. Statistics and factual data and other information presented are from sources believed to be reliable, but their accuracy cannot be guaranteed. It is furnished on the basis and understanding that Raymond James is to be under no liability whatsoever in respect thereof. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Raymond James advisors are not tax advisors, and we recommend that clients seek independent advice from a professional advisor on tax-related matters.
Information Age, Linda Tucci, Industry editor- CIO/It Strategy, TechTarget
Why the world is better than you think, Marcus Gee, The Globe and Mail, April 11, 2025
TSX ends lower but still notches third straight weekly gain, Fergal Smith, Reuters, April 125, 2025
Global markets weekly update - Trade tensions show some signs of easing, T. Rowe Price, April 25, 2025
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