Canadian Money Managers Prepare for Market Turbulence as Trade War Escalates
Toronto, Ontario (July 5, 2023) - Canadian financial professionals are bracing for increased volatility in the markets this week as trade tensions between Canada and the United States continue to escalate.
Bay Street Shifts to Safer Assets
Bay Street money managers are seeking refuge in safer assets, including precious metals, cash, and US dollar bonds, in response to President Trump's executive order imposing tariffs on Canada.
Canadian Dollar Slides to 22-Year Low
The Canadian dollar has continued its downward trend, reaching its lowest intraday level in nearly 22 years on Monday. Market strategists predict it could potentially fall as low as 65 Canadian cents.
Gold and Gold-Related Stocks Emerge as Havens
Gold, traditionally a safe haven asset, has experienced renewed interest as a result of the trade war. Materials was the only sector in the green on Monday morning, driven by rising gold prices.
Canadian Stock Index Plunges
Canada's main stock index, the S&P/TSX Composite Index, suffered its biggest intraday decline since August 2022 on Monday, dragged down by the impact of tariffs. However, losses were partially recovered after Mexico's president hinted at a potential delay in tariffs on his country.
Domestic Companies Offer Resiliency
Market experts suggest that domestic companies with resilience to tariffs and recessions may provide stability during the trade war-related volatility. Examples include retailers, telecommunications providers, and resource companies.
Prolonged Impact Anticipated
Analysts believe that the tariffs are likely to have a longer-lasting impact than initially anticipated. They advise traders to adjust their portfolios accordingly, recognizing that tariffs may become a permanent fixture in the economic landscape.