Latest news with #BMOPrivateWealth
Hamilton Spectator
23-07-2025
- Business
- Hamilton Spectator
S&P/TSX composite closes higher, U.S. markets up after U.S.-Japan trade deal
TORONTO - Gains in consumer and financial stocks helped lift Canada's main stock index to finish higher Wednesday, while U.S. markets reached new highs after the announcement of a U.S.-Japan trade deal. The S&P/TSX composite index was up 51.98 points at 27,416.41. In New York, the Dow Jones industrial average was up 507.85 points at 45,010.29. The S&P 500 index was up 49.29 points at 6,358.91, adding 0.8 per cent to its all-time high. Meanwhile, the Nasdaq composite was up 127.33 points at 21,020.02, climbing 0.6 per cent to hit its own record. 'Clearly market participants like another piece of the clarity puzzle falling into place with the arrangement overnight between the U.S. and Japan and also Indonesia and the Philippines yesterday,' said Carol Schleif, chief market strategist at BMO Private Wealth. U.S. President Donald Trump announced a trade framework that would place a 15 per cent tax on imports coming from Japan. That's lower than the 25 per cent rate Trump had earlier said would kick in on Aug. 1. 'Every piece of clarity that comes through, markets are really liking because they really desperately want to move beyond the tariff issue,' she said. Trump has proposed stiff taxes on imports from around the world, which carry the double-edged risk of driving up inflation for U.S. households while slowing the economy. But many of Trump's tariffs are currently on pause, giving time to reach deals with other countries that could lower rates. Trump also announced a trade agreement with the Philippines on Tuesday. Over the long run, Schleif said it is critical for the U.S. to get deals with trading partners like China, Mexico and Canada. She noted the narrative regarding tariffs has 'shifted more positive.' Ahead of the looming Aug. 1 tariff deadline, when a pause on a slew of U.S. tariffs is set to expire, Schleif said market participants don't seem overly concerned. 'I think the lesson learned all year is that the deadlines are meant to try to accelerate the conversation, not necessarily as a hard and fast rule,' she said. 'President Trump and his administration clearly want to get stuff done and done quickly, and they don't have patience for the way diplomacy usually works, where it takes a very long time and lots of handshakes and lots and meetings. They're definitely having lots of meetings, but it's on an accelerated schedule, and they're trying to get a lot of this stuff buttoned up.' Going forward, Schleif said she expects equity markets to face some tailwinds. 'Globally, there are a lot of questions about how much longer this can persist. But the interesting thing is the dynamics on the globe are pretty positive for equity markets,' she said. On the TSX, Canadian National Railway Co. was one of the largest downside contributors a day after it cut its outlook amid trade volatility. CN shares finished 4.17 per cent lower on Wednesday. The Canadian dollar traded for 73.48 cents US compared with 73.34 cents US on Tuesday. The September crude oil contract was down six cents US at US$65.25 per barrel. The August gold contract was down US$46.10 at US$3,397.60 an ounce. This report by The Canadian Press was first published July 23, 2025. — With files from The Associated Press. Companies in this story: (TSX: GSPTSE, TSX: CADUSD, TSX: CNR)
CTV News
29-05-2025
- Business
- CTV News
Trump tariffs suffer staggering setback in U.S. court
Carol Schleif, chief market strategist at BMO Private Wealth, shares her outlook of the market and analysis on the setback Trump tariffs got in a U.S. court.
Asharq Al-Awsat
18-05-2025
- Business
- Asharq Al-Awsat
Moody's Downgrade Intensifies Investor Worry about US Fiscal Path
A US sovereign downgrade by Moody's has exacerbated investor worries about a looming debt time-bomb that could spur bond market vigilantes who want to see more fiscal restraint from Washington. The ratings agency cut America's pristine sovereign credit rating by one notch on Friday, the last of the major ratings agencies to downgrade the country, citing concerns about the nation's growing $36 trillion debt pile. The move came as Republicans who control the House of Representatives and the Senate seek to approve a sweeping package of tax cuts, spending hikes and safety-net reductions, which could add trillions to the US debt pile. Uncertainty over the final shape of the so-called "Big Beautiful Bill" has investors on edge even as optimism has emerged over trade. The bill failed to clear a key hurdle on Friday even as US President Donald Trump called for unity around the legislation. "The bond market has been keeping a sharp eye on what transpires in Washington this year in particular," said Carol Schleif, chief market strategist at BMO Private Wealth, who said that Moody's downgrade may make investors more cautious. "As Congress debates the 'big, beautiful bill' the bond vigilantes will be keeping a sharp eye on making them toe a fiscally responsible line," she said, referring to bond investors who punish bad policy by making it prohibitively expensive for governments to borrow. The downgrade from Moody's, which follows similar moves from Fitch in 2023 and Standard & Poor's in 2011, will "eventually lead to higher borrowing costs for the public and private sector in the United States,' said Spencer Hakimian, founder of Tolou Capital Management in New York. Even so, the ratings cut was unlikely to trigger forced selling from funds that can only invest in top-rated securities, said Gennadiy Goldberg, head of US rates strategy at TD Securities, as most funds revised guidelines after the S&P downgrade. "But we expect it to refocus the market's attention on fiscal policy and the bill currently being negotiated in Congress," Goldberg said. FOCUS ON BILL One question is how much pushback there will be in Congress over whether fiscal principles are being sacrificed, said Scott Clemons, chief investment strategist at Brown Brothers Harriman, adding that a bill that shows profligate spending could be a disincentive to add exposure to long-dated Treasuries. The Committee for a Responsible Federal Budget, a nonpartisan think tank, estimates the bill could add roughly $3.3 trillion to the country's debt by 2034 or around $5.2 trillion if policymakers extend temporary provisions. Moody's said on Friday successive administrations have failed to reverse the trend of higher fiscal deficits and interest costs, and it did not believe that material reductions in deficits will result from fiscal proposals under consideration. Concern shows up in market pricing. A recent increase in the 10-year Treasury term premium - a measure of the return investors demand for the risk of holding long-dated debt - is partly a sign of underlying fiscal worry in the market, said Anthony Woodside, head of fixed income strategy at Legal & General Investment Management America. Woodside said the market was "not assigning much credibility" to the deficit being brought down in a material way. Treasury Secretary Scott Bessent has said the administration is focused on containing benchmark 10-year yields. The yield, last seen at 4.44%, is about 17 basis points below where it was before Trump took office in January. "Certainly you could see a reaction in yields to a pretty substantial increase in the deficit at a time when we're already running pretty significant deficits," said Garrett Melson, portfolio strategist with Natixis Investment Managers Solutions. A White House spokesperson dismissed concerns around the bill. "The experts are wrong, just as they were about the impact of Trump's tariffs, which have yielded trillions in investments, record job growth, and no inflation," said Harrison Fields, special assistant to the President and principal deputy press secretary, in a statement. The White House characterized the Moody's downgrade as political. White House communications director Steven Cheung reacted to the move via a social media post on Friday, singling out Moody's economist, Mark Zandi, and calling him a political opponent of Trump. Zandi, who is chief economist at Moody's Analytics, a separate entity from the ratings agency, declined to comment. Some in the market believe the fiscal outlook will improve with the tax package compared to earlier expectations, due to tariff revenues and spending offsets. Barclays now estimates the cost of the bill to increase deficits by $2 trillion over the next 10 years compared to expectations of around $3.8 trillion before Trump took office. X FACTOR? Urgency is mounting as key deadlines approach. House Speaker Mike Johnson has said that he wants his chamber to pass the bill before the US Memorial Day holiday on May 26, while Bessent has urged lawmakers to raise the federal government's debt limit by mid-July. The US government reached its statutory borrowing limit in January and began employing "extraordinary measures" to keep it from breaching the cap. Bessent has indicated the government could hit the so-called X-date - when it runs out of cash to meet all its obligations - by August. Investor nervousness around the debt limit has started to show up. The average yield on Treasury bills due in August is higher than the yield of bills with adjacent maturities. While there is broad agreement within the Republican Party to extend Trump's 2017 tax cuts, there is a divide on how to achieve spending cuts that would help offset revenue loss. The room for manouvre on spending cuts is limited. Mandatory spending, including on social welfare programs that Trump has pledged not to touch, accounted for a vast majority of total budgetary spending last year. A politically viable fiscal package will likely lead to wider deficits in the near term, and at the same time it won't provide a meaningful fiscal boost to the economy, said Michael Zezas, a strategist at Morgan Stanley, in a note published last week. Anne Walsh, chief investment officer at Guggenheim Partners Investment Management said that without a real process in Washington aimed at significantly resetting spending levels, a meaningful improvement in the US fiscal path is unlikely. "This is an unsustainable course that we're on," she said.
Yahoo
18-05-2025
- Business
- Yahoo
Analysis-Moody's downgrade intensifies investor worry about US fiscal path
By Davide Barbuscia NEW YORK (Reuters) -A U.S. sovereign downgrade by Moody's has exacerbated investor worries about a looming debt time-bomb that could spur bond market vigilantes who want to see more fiscal restraint from Washington. The ratings agency cut America's pristine sovereign credit rating by one notch on Friday, the last of the major ratings agencies to downgrade the country, citing concerns about the nation's growing $36 trillion debt pile. The move came as Republicans who control the House of Representatives and the Senate seek to approve a sweeping package of tax cuts, spending hikes and safety-net reductions, which could add trillions to the U.S. debt pile. Uncertainty over the final shape of the so-called "Big Beautiful Bill" has investors on edge even as optimism has emerged over trade. The bill failed to clear a key hurdle on Friday even as U.S. President Donald Trump called for unity around the legislation. "The bond market has been keeping a sharp eye on what transpires in Washington this year in particular," said Carol Schleif, chief market strategist at BMO Private Wealth, who said that Moody's downgrade may make investors more cautious. "As Congress debates the 'big, beautiful bill' the bond vigilantes will be keeping a sharp eye on making them toe a fiscally responsible line," she said, referring to bond investors who punish bad policy by making it prohibitively expensive for governments to borrow. The downgrade from Moody's, which follows similar moves from Fitch in 2023 and Standard & Poor's in 2011, will "eventually lead to higher borrowing costs for the public and private sector in the United States,' said Spencer Hakimian, founder of Tolou Capital Management in New York. Even so, the ratings cut was unlikely to trigger forced selling from funds that can only invest in top-rated securities, said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, as most funds revised guidelines after the S&P downgrade. "But we expect it to refocus the market's attention on fiscal policy and the bill currently being negotiated in Congress," Goldberg said. FOCUS ON BILL One question is how much pushback there will be in Congress over whether fiscal principles are being sacrificed, said Scott Clemons, chief investment strategist at Brown Brothers Harriman, adding that a bill that shows profligate spending could be a disincentive to add exposure to long-dated Treasuries. The Committee for a Responsible Federal Budget, a nonpartisan think tank, estimates the bill could add roughly $3.3 trillion to the country's debt by 2034 or around $5.2 trillion if policymakers extend temporary provisions. Moody's said on Friday successive administrations have failed to reverse the trend of higher fiscal deficits and interest costs, and it did not believe that material reductions in deficits will result from fiscal proposals under consideration. Concern shows up in market pricing. A recent increase in the 10-year Treasury term premium - a measure of the return investors demand for the risk of holding long-dated debt - is partly a sign of underlying fiscal worry in the market, said Anthony Woodside, head of fixed income strategy at Legal & General Investment Management America. Woodside said the market was "not assigning much credibility" to the deficit being brought down in a material way. Treasury Secretary Scott Bessent has said the administration is focused on containing benchmark 10-year yields. The yield, last seen at 4.44%, is about 17 basis points below where it was before Trump took office in January. "Certainly you could see a reaction in yields to a pretty substantial increase in the deficit at a time when we're already running pretty significant deficits," said Garrett Melson, portfolio strategist with Natixis Investment Managers Solutions. A White House spokesperson dismissed concerns around the bill. "The experts are wrong, just as they were about the impact of Trump's tariffs, which have yielded trillions in investments, record job growth, and no inflation," said Harrison Fields, special assistant to the President and principal deputy press secretary, in a statement. The White House characterized the Moody's downgrade as political. White House communications director Steven Cheung reacted to the move via a social media post on Friday, singling out Moody's economist, Mark Zandi, and calling him a political opponent of Trump. Zandi, who is chief economist at Moody's Analytics, a separate entity from the ratings agency, declined to comment. Some in the market believe the fiscal outlook will improve with the tax package compared to earlier expectations, due to tariff revenues and spending offsets. Barclays now estimates the cost of the bill to increase deficits by $2 trillion over the next 10 years compared to expectations of around $3.8 trillion before Trump took office. X FACTOR? Urgency is mounting as key deadlines approach. House Speaker Mike Johnson has said that he wants his chamber to pass the bill before the U.S. Memorial Day holiday on May 26, while Bessent has urged lawmakers to raise the federal government's debt limit by mid-July. The U.S. government reached its statutory borrowing limit in January and began employing "extraordinary measures" to keep it from breaching the cap. Bessent has indicated the government could hit the so-called X-date - when it runs out of cash to meet all its obligations - by August. Investor nervousness around the debt limit has started to show up. The average yield on Treasury bills due in August is higher than the yield of bills with adjacent maturities. While there is broad agreement within the Republican Party to extend Trump's 2017 tax cuts, there is a divide on how to achieve spending cuts that would help offset revenue loss. The room for manoeuvre on spending cuts is limited. Mandatory spending, including on social welfare programs that Trump has pledged not to touch, accounted for a vast majority of total budgetary spending last year. A politically viable fiscal package will likely lead to wider deficits in the near term, and at the same time it won't provide a meaningful fiscal boost to the economy, said Michael Zezas, a strategist at Morgan Stanley, in a note published last week. Anne Walsh, chief investment officer at Guggenheim Partners Investment Management said that without a real process in Washington aimed at significantly resetting spending levels, a meaningful improvement in the U.S. fiscal path is unlikely. "This is an unsustainable course that we're on," she said.
Bloomberg
16-05-2025
- Business
- Bloomberg
Equities Climb Despite Inflation Angst
Bloomberg Television brings you the latest news and analysis leading up to the final minutes and seconds before and after the closing bell on Wall Street. Today's guests are BMO Private Wealth Chief Market Strategist Carol Schleif, JPMorgan US Inflation Strategy Head Phoebe White, Seaport Research Partners Senior Analyst David Joyce, Bogg Bag Founder and CEO Kim Vaccarella, American Century Investments Multi-Asset Strategies CIO Richard Weiss, 22V Research Washington Policy Research Head Kim Wallace, PWC CTIO Matt Wood, WSL Strategic Retail CEO and Chief Shopper Wendy Liebmann, JLL Retail Advisory Services President Naveen Jaggi, Glowbar CEO and Founder Rachel Liverman (Source: Bloomberg)
