Relief Rally ⚖️

Relief Rally ⚖️ Markets snapped back on hope, not certainty, as oil and war headlines kept investors on edge.

Highlights From Last Week:

• 📈 Stocks posted their first weekly gain since the Iran conflict began
• 🛢️ Oil remained the pressure point, climbing back above US $110
• ⚡ Markets continue to react to headlines, not fundamentals

Transcript

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SPEAKER_01 0:00

This week was a real whirlwind for U.S. stock markets. Prices bounced all over the place because of the Iran conflict. At the start of the week, everyone was unsettled. SP and Nasdaq dropped, and the Dow didn't do much. Then by Tuesday, there was a sudden surge in optimism, and everything rallied while oil prices relaxed a bit. Wednesday kept the good mood with some gains, and while Thursday didn't see much action, the market held steady even though oil crept above $110 a barrel. By the end of the week, markets actually managed their first winning stretch since the Iran tension began.

SPEAKER_00 0:36

You know, moments like these really drive home the point that risk management is crucial. As North American investors, we have to expect short-term volatility, especially when geopolitical tensions loom so large over the market. It also reminds us that while markets can swing back when there's hope, unpredictable costs like rising oil prices can affect not just the market overall, but also company profits and our strategies for where to put our money next.

SPEAKER_01 1:05

Switching gears to Canada, we saw just as much drama in the stock market, all thanks to that same global uncertainty and those persistent oil price hikes. Monday started with a bit of a promise, but those early gains quickly evaporated. Then Tuesday gave us a strong comeback on hopes that the tension in Iran might ease. Even with modest gains on Wednesday, it felt like optimism could falter at any moment. Thursday still ended on an okay note, but there was a shadow of tension thanks to all the tough talk from the U.S. president. Energy and financial stocks gave us some much needed stability, but if you held tech or highly leveraged companies, you probably felt a little extra stress.

SPEAKER_00 1:48

So when we look at opportunities in this kind of environment, optimism can really drive those occasional rallies. Still, with all these geopolitical factors and skyrocketing oil, volatility is high no matter which market we look at. If you're like us, balancing between sectors, it's just another reason to focus on the relative safety of energy and financial stocks and be extra cautious with tech or heavily leveraged plays right now.

SPEAKER_01 2:15

Let's take a look at crypto. Bitcoin ended the week just above $66,000, not a lot of movement considering how wild the global news has been. Trading was extremely subdued, partly because of the Good Friday holiday, and partly because everyone seemed to be waiting to see how the Middle East situation plays out. Earlier in the week, Bitcoin even touched $68,000, but cooled off after the US president's tougher stance on Iran. Even though it's not back to its peak, Bitcoin is still holding up, and altcoins like Ethereum, XRP, Solana, Cardano, Polygon, and Dogecoin barely moved, showing that people are in a watch and wait mood across crypto.

SPEAKER_00 2:57

For investors like us, it's a reminder that crypto markets are highly sensitive to global events. There's a lot of caution right now, especially in altcoins. It really shows that risk appetite is split. Some are staying cautious, others are ready for opportunities if the tide turns. The landscape for digital assets stays delicate, and a pause in trading or outside news can really move the needle.

SPEAKER_01 3:22

Meanwhile, in emerging markets like the Gulf, stock prices slipped after a U.S. presidential speech offered little hope that the Middle East conflict would end soon. Places like Dubai and Abu Dhabi saw small drops, with maritime risks and even a missile strike on a Qatari tanker making investors even more nervous. Oil shot up about 7%, which was a bit of a silver lining for energy exporters. Still, across the region, investors seem to be waiting for direction, causing quick swings in local stocks.

SPEAKER_00 3:53

These swings in emerging markets remind all of us how unpredictable things are when conflicts affect oil and shipping. The energy sector might do well with higher oil prices, but for the rest of the market, there's just so much uncertainty. You really can't afford to be complacent, especially if you're invested in those regions.

SPEAKER_01 4:14

On the topic of commodities, gold and silver had a rough end to this week. After an ambiguous speech from the U.S. President about Middle East tensions, gold dropped almost 4.3%, breaking a four-day winning streak, and silver followed suit. Some investors even sold gold to cover other portfolio losses. Even though the prices steadied later, the traditional safe have and roll of gold isn't living up to its usual expectations, especially with ongoing inflation and interest rate worries.

SPEAKER_00 4:44

That unpredictability in gold and silver tells us that crowding into so-called safe trades doesn't always work out like it used to. With so many forces at play, the lesson is to really keep your finger on the pulse of the market and not rely too much on historical patterns.

SPEAKER_01 5:01

Another hot topic in the headlines is the SpaceX IPO. They've filed quietly in the US, and people think it could end up the biggest IPO ever, especially after their merger with XAI. It's the talk among anyone interested in space, satellites, or artificial intelligence. Retail investors like us can't buy yet, but there's already the sense that once shares are available, there'll be hype and probably some wild price swings.

SPEAKER_00 5:28

Even before SpaceX is actually trading, there's a lot of excitement growing in the broader AI and space sectors just because of this IPO talk. Investors are getting geared up, watching not just SpaceX but similar companies for potential ripple effects across tech and other high-growth industries. It's a classic example of anticipation shaping sentiment even before the real action starts.

SPEAKER_01 5:52

Looking at healthcare, the U.S. president has made deals with 16 major pharmaceutical companies to lower drug prices. Patients will be able to buy discounted medicines through a government portal with savings on essentials like insulin and arthritis treatments. Almost every big pharmaceutical company signed on, except one, and there are also massive commitments for reinvesting in the U.S.

SPEAKER_00 6:17

health sector. That's some complicated news for investors. On the one hand, cutting drug prices could squeeze profits, but direct-to-consumer sales and renewed investment might also open up new ways to grow for those same companies. It's really a mixed bag for anyone holding pharma stocks.

SPEAKER_01 6:35

ESG is still making headlines. Nestle has teamed up with the International Labor Organization to improve labor standards for coffee workers in Latin America. This two-year program is working across Brazil, Colombia, and Mexico to make recruitment fairer and working conditions better. All as part of Nestle's broader promise to make coffee production more sustainable and socially responsible.

SPEAKER_00 7:00

For investors, moves like this show that social and governance factors are just as important as environmental ones when it comes to company reputation and long-term value. Companies addressing labor rights could lower their regulatory and reputational risks and maybe even be seen more favorably by long-term capital.

SPEAKER_01 7:20

Finishing up, here's our jargon word of the week. Subsidy. Basically, a subsidy is when the government or some organization gives money to make certain products or activities cheaper. They're usually intended to support industries or areas that the government thinks are important.

SPEAKER_00 7:37

So, for example, if you heard someone say, the government offered a subsidy to farmers to help lower the cost of producing wheat, now you know exactly what they mean.

SPEAKER_01 7:47

That wraps up another episode. We hope your investment journey this week is a little smoother, thanks to these insights from FinLady. Stay curious, stay cautious, and we'll be here to help you make sense of the market. One update at a time. 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. FinLity 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.