War Winds 🌪️

Markets jerked back and forth last week as the Iran conflict sent oil prices surging and inflation fears climbing. 

Highlights From Last Week:

• 🛢️ Oil surged above US $100 as Middle East tensions escalated.
• 📉 U.S. indexes swung sharply as inflation fears resurfaced.
• ⚡ Energy stocks gained while airlines and consumer sectors weakened.

Transcript

SPEAKER_01 0:00

Mike, wow, what a volatile week on the US markets. One day we're up, the next day sharp drops, all thanks to escalating tensions in the Middle East and those wild oil price swings. I couldn't believe it when the week started with a big drop, but then the SP 500 actually rallied back midday. By Thursday, though, everything turned south again as oil soared over$100 a barrel and inflation jitters returned. I'll be honest, watching stocks and bonds swing together with oil can really test your nerves, even for those of us who try to keep a level head. Having a long-term perspective definitely helps when things get wild like this, don't you think?

SPEAKER_00 0:42

Absolutely, Sarah. Every time we get a global shock, like an international conflict or a sudden jump in commodities, it reinforces just how interconnected everything is. I find myself checking my portfolio and thinking about what parts are really exposed to those types of headlines. Staying invested and not giving in to panic has worked out for us in the past. It's all about riding out the volatility instead of reacting to every dip or spike. By the way, if you haven't yet, exploring your own risk profile with Finleady can really help you stick to your plan through times like these. Shifting gears a bit, the Canadian market had its own roller coaster this week. Sarah, what stood out for you on the TSX side?

SPEAKER_01 1:26

Canadian stocks definitely took their cues from oil prices and those big US-Iran headlines, just like you'd expect. Energy companies like Canadian Natural Resources and Suncor actually helped cushion the blow, so the TSX managed better than some other markets. Still, that unexpected jobs report was a tough pill to swallow. 84,000 jobs lost in a month and our unemployment rate ticking up. That kind of weakness, especially if it hits real estate, makes me grateful we've stayed diversified across sectors in our portfolio. What's your take on how commodity-driven sectors can swing the whole market, Mike?

SPEAKER_00 2:05

It really drives home how important it is to understand what's powering your regional index. Commodities can lift or drag down the broader market really quickly. For me, following the drivers in each sector and even each region helps us figure out when those big fast swings might give us opportunities or when we might need to brace for impact. On another note, let's talk about crypto, because Bitcoin did something interesting this week. Exactly.

SPEAKER_01 2:34

Bitcoin managed to keep steady near$70,000 despite the turbulence everywhere else. What's fascinating is that even with stocks and tech struggling, Bitcoin and crypto ETFs have kept rising, showing some independence from their usual pattern of tracking tech. Its correlation with gold turned positive, meaning more investors seem to be treating it like a safe haven when the dollar weakens. That's a big shift from last year when it all moved together. Mike, as someone who's seen Bitcoin ride all sorts of waves, what do you make of this?

SPEAKER_00 3:07

It's a sign that crypto's role is evolving. More people are starting to treat Bitcoin as something unique, not just a tech proxy. As investors, we're seeing it take on an identity closer to gold than to growth stocks, especially during global stress. It's a reminder not to lump all risk assets together. It also suggests we need to rethink how crypto fits in a diversified portfolio. Meanwhile, over in emerging markets, the story is all about how world events are keeping things unpredictable. That's definitely true.

SPEAKER_01 3:40

Emerging markets felt the pressure this week as ongoing conflict and rising oil prices pushed Dubai's stocks to their lowest since last June, and South Africa is looking at its first monthly dip after more than a year of gains. Even Turkey is seeing some hesitation with its central bank decision looming. There's a mixed picture across the board. Some regions are steady, others are faltering, which really shows just how sensitive these markets are. For us as North American investors, it's a reminder to keep an eye on macro trends, not just what's happening at home, right?

SPEAKER_00 4:16

Absolutely. Every time there's a global shock, emerging markets react in their own way. Sometimes currencies take the hit, sometimes it's stocks or bonds. That's why it's important not to treat all emerging economies as one big group. Speaking of global shocks, I think the commodity markets deserve a closer look, especially with oil making headlines.

SPEAKER_01 4:37

The International Energy Agency's release of strategic reserves in response to the Middle East conflict has really captured everyone's attention. With the Strait of Hormuz bottlenecked, we've seen the biggest oil supply disruption in history, pushing prices to almost$120 a barrel. Some countries are scrambling to find new export routes, but in the short term, it's basically a patch job. For me, this is a prime example of how reliant the world is on certain supply chains and how quickly markets can react to disruptions.

SPEAKER_00 5:12

Right, even big strategic moves sometimes only provide a temporary fix. For us as investors, that uncertainty translates into wild price swings in the energy markets. It's a good reminder of why building resilience across our holdings is so important. Next up, we've got the latest on some of the wildest market stories. Let's talk about meme stocks, starting with GameStop.

SPEAKER_01 5:35

GameStop is back in the spotlight, clocking in a double-digit gain for the year while other meme stocks are struggling. There's chatter about the CEO making a big move, and retail sentiment is definitely more positive, plus, some insider buying has caught people's attention. And GameStop is adapting, shifting focus to collectibles, digital gaming, and even Bitcoin investments. Regardless of what you think about the fundamentals, it's a lesson in how much social media and retail enthusiasm can shape a stock's fate.

SPEAKER_00 6:07

It just goes to show how online communities are changing the way we invest and adding another layer of unpredictability. Trading patterns for certain companies are increasingly about narrative and momentum, not just the numbers. Speaking of companies having a tough time, did you hear about Honda's announcement?

SPEAKER_01 6:27

Yes, it's pretty historic. Honda expects its first annual loss since 1957, mostly due to restructuring in its electric vehicle business. The demand for EVs in the U.S. turned out weaker than they expected, especially with policy support fading. They've pulled the plug on some new models and are facing stiff competition in China. For us, this speaks to how even legacy giants are struggling to adjust and why we have to watch industry trends and policy closely.

SPEAKER_00 6:56

And it highlights that the path toward new technology, even in investments, is rarely straight. We need to be ready for these shifts and value adaptability. Now let's touch on ESG investing, which is getting more complicated than ever.

SPEAKER_01 7:11

It sure is. BP has slowed its green energy transition, but a lot of ESG-focused funds still hold its shares. There's a debate, is it about following index rules, trying to influence company behavior, or is it just greenwashing? BP is even moving to take old climate-related shareholder resolutions off the books. It's a reminder that ESG funds face real-world constraints, and there's often a gap between stated goals and actual holdings.

SPEAKER_00 7:38

It underscores why, as investors, we can't just look at the ESG label and assume everything is perfectly sustainable. It's always worth digging into the details of how those funds operate and what they really own. Before we go, let's lighten things up with our financial jargon word of the week. Sarah, want to take this one? Absolutely.

SPEAKER_01 8:00

This week's term is rotation trade. It's when investors move their money from one sector, asset class, or market to another because they expect different areas to outperform under new conditions. For example, lately, some investors have been shifting from tech to energy, like musical chairs, hoping they pick the right seat before the music stops. Thanks for joining us on the FinLeadie Podcast. We hope our experiences help you on your journey. Until next time, keep learning, stay curious, and remember, investing is a team sport. Just a heads up. Everything we talk about on this podcast is for education and general info only. We're not giving financial or investment advice, and we're definitely not telling you what to buy or sell. FinLeady isn't a registered advisor, so if you're making money moves, talk to a pro who knows your situation. Cool? Now don't forget to sign up to our newsletter so that you don't miss a market beat.