Bourstad stock market simulations - Summary of the markets for the week ended on March 7, 2025

Stocks, bonds and US dollar down sharply

Stocks, bonds and the US dollar fell sharply over the week; commodities and crypto moved with no clear direction. The week saw weak employment growth in February in both Canada and the United States. In Canada, the trade surplus for January was $4 billion, the highest since May 2022; it seems that US customers of Canadian exports wanted to bring forward purchases in anticipation of the new US administration's imposition of tariffs. In the United States, the ISM indexes for manufacturing and services remained in expansion territory, at 50.3 for the manufacturing ISM and 53.5 for the services ISM; the 50 threshold demarcates expansion from contraction. Over the week, the new US administration's tariff waltz-hesitation continued with the imposition of tariffs on Canadian and Mexican imports of 25% on Tuesday, the postponement for 30 days on Wednesday of tariffs affecting the automobile sector, and the suspension for 30 days on Thursday of goods and services covered by the Canada-US-Mexico Agreement (CUSMA). On Friday, President Trump threatened Canada with 250% tariffs on dairy products and softwood lumber. Elsewhere in the world, the new coalition that will lead Germany announced a 500-billion-euro plan for infrastructure development and increased military spending; in all, the European Union has decided to invest 800 billion euros in military spending. Over the coming week, we'll be keeping an eye on: In Canada, the Bank of Canada's key rate decision (Wednesday) and January manufacturing sales (Friday); in the US, February inflation (Wednesday) and the University of Michigan's consumer sentiment index for March (Friday).

Four of the six stock markets we follow ended the week down. The Shanghai Stock Exchange ended the week up 1.6%, and is the best-performing stock market since the start of the 2025 Bourstad Challenge. The Paris Bourse was the other stock market to end the week up, with a modest gain of 0.1%. The Tokyo Stock Exchange limited its losses to -0.7%. The North American stock markets recorded the biggest declines: -2.5% for the Toronto Stock Exchange, -3.1% for the New York Stock Exchange, and -3.3% for the NASDAQ 100; the NASDAQ 100 is also the market that has fallen the most since the start of the 2025 Bourstad Challenge, with a decline of -6.0%.

Yields on 10-year government bonds are rising for the four top-rated countries we track. Higher yields mean lower bond prices, given the inverse relationship between yields and bond prices. U.S. bond yields, the main market benchmark, are up 8 bps to 4.30% (1 basis point or bps = 0.01%). The Canadian bond yield rises by 13 bps, making the Canadian rate 127 bps lower than the U.S. rate. Germany's bond yield jumps 43 bps to 2.84%. Japan's bond yield rose 15 bps to 1.52%.

On the commodities market, two of the four commodities we track are up. The rising commodities are the metals in our tracking universe: copper is up 3.6%, while gold is back above USD 2,900 with a gain of 1.8%. During the week, Canada began applying a 25% tariff on copper imported from the USA. Corn edged down -0.1%, while oil fell -3.9%.

In the crypto-currency sector, the two cryptos we follow are moving in diverging directions: bitcoin up 3.4%% and ethereum down -3.8%.

On March 7, it cost 0.9¢ CAD less to buy one US dollar than on February 28. The euro and yen are also up against Uncle Sam's dollar: the single European currency by 4.4% and the Japanese currency by 1.8%.

See the detailed table by following this link:

https://iclf.ca/DL/BT25_sommaire_marches_250307.pdf

Paul Bourget
Project Director, Bourstad
CIRANO
paul.bourget@cirano.qc.ca

About CIRANO (www.cirano.qc.ca )

The Center for Interuniversity Research and Analysis of Organizations (CIRANO) is a multidisciplinary, liaison and transfer research center, whose mission is to accelerate the transfer of knowledge between the research community and users in industry and public services.

About BOURSTAD (www.bourstad.ca )

The Bourstad program is an activity of the Center for Interuniversity Research and Analysis of Organizations (CIRANO) which receives support from many partners for this financial education project: the Autorité des marchés financiers, its main partner, TD Bank, CFA Montreal , the Canadian Investment Regulatory Organization (CIRO), Les Affaires, Finance Montreal, TMX Group, Hyprasoft, Groupe Investissement responsable and QuoteMedia.