Global Markets, Canadian Politics, and the New Gold Rush

The Market Online

24-04-2025

Transcript
The Canadian Securities Exchange presents your go-to source for trends in junior and small cap markets each month. Join host Anna Seren and financial expert Bruce Campbell in partnership with Stockhouse.
ANNA
Hi, my name's Anna Seren. I'm director of Listings Development with the Canadian Securities Exchange.
You're joining us for episode three of The Market This Month . The markets have been on edge as the world continues to wake up to daily updates surrounding looming trade wars. What we've witnessed is nothing short of historic: a $10 trillion global market swing over just 10 days.
In April of 2025, investors are being reminded of the darkest chapters in market history—Black Tuesday in 1929, the 2008 collapse of Lehman Brothers, the pandemic shock of 2020. And now to that list, we add a new entry: Liberation Day.
This latest market meltdown was triggered by President Donald Trump following a series of sweeping tariff announcements over the past two weeks. The fallout has been dramatic. Between April 2nd and April 9th, $10 trillion was wiped from the global markets as investors fled U.S. equities, and most notably, U.S. treasuries.
Perhaps the most shocking signal was a mass sell-off of U.S. Treasury bills, long considered the ultimate safe haven. The sudden plunge in both treasuries and the U.S. dollar has raised serious questions about investor confidence and global economic stability.
In true Trump fashion, late on Friday, April 11th, he made a surprise announcement: a temporary suspension on tariffs on smartphones and laptop imports—80% of which are sourced from China. This was seen as a partial lifeline to tech giants like Apple, whose supply chains have been deeply rooted in East Asia for decades.
While Apple has pledged to move some of its operations back to the U.S., including a $500 billion investment in a massive AI server facility in Texas, most of its international production remains vital to its global strategy.
Thank you again for joining us for episode three of The Market This Month . I'm, of course, joined by my wonderful co-host, Bruce Campbell with Stone Castle Investment Management. Thank you for joining me, Bruce.
BRUCE
Yeah, great to be live again, right? Well, we said we weren't going to talk about tariffs this month, but guess what we're going to do? We're going to talk about tariffs, aren't we?
ANNA
We pretty much have to. We have to talk about tariffs. Alright, well, let's get into it. Obviously, it's been a crazy month. We just talked about what's happened over the past month. Tell us your thoughts on how this is going to affect the market. I mean, obviously it's a lot of volatility, right?
BRUCE
We saw the tariffs announced and the market went down by 14% immediately, and then the pause came and the markets rallied back 12% as of the time of this recording. But there's still so much uncertainty as far as what's going to happen. It's a 90-day pause. In the meantime, what can happen? Can there be different tariffs? Can there be more tariffs? That uncertainty is not what most investors like, and so there's going to be more volatility, unfortunately.
ANNA
And I think when we look at things that have happened in history that have caused these types of fluctuations in the market, usually there's some event that it's surrounding. But this is an event that feels like it keeps happening, and we never know when it's going to change.
BRUCE
Yeah, and I think Trump is obviously that event. I don't even know if Trump knows what he's doing next, or maybe he does have some master plan. But as an investor, I feel the same fear—what's going to happen next? So I feel like I'm just bracing and trying to hold on.
ANNA
Is that, do you think, what most investors are feeling?
BRUCE
Yeah, the fear of the unknown is a big one. How much bluffing and how much art of the deal is involved here, and how much of it is just kind of out of his control? I think most people feel there's a degree of both happening.
ANNA
And that out-of-control feeling is like, well, what happens if they make a policy error and we hit a recession? What does that mean for the markets?
BRUCE
If they are able to keep everything in control and all the pieces in place, then we could have had a downturn and perhaps they'll have their great economic policy that they roll out in tax savings, and markets will go higher. But if they happen to misstep and they send the economy into recession—woo, that's a whole other thing.
ANNA
Okay, so I want to ask you this about the tariffs. Because we hear about it on the news and all the media is talking about tariffs, but I want to ask you from an investment standpoint: how do the tariffs affect our investments?
BRUCE
Obviously it's going to hurt margin for certain companies on their ability to have bigger revenues and be able to grow.
ANNA
Is there a downside to this? Is there a potential upside once the tariffs are settled? Is there some kind of benefit or downfall, and how does this actually affect the companies that we're choosing to invest in?
BRUCE
Most economists that you talk to don't feel that there's really any upside to tariffs unless you're specifically looking at it from the U.S. tax or revenue perspective—it's really a form of tax.
Now, looking at it from a company perspective, it's kind of interesting because the companies hit hardest by all this are U.S. companies. Some are affected by tariffs because they have products produced in tariffed regions.
Say you're a Canadian company selling into the U.S. and a tariff is put on your product—that's going to impact your margins and potentially your sales. Suddenly your product is 10% higher due to the tariff, so now you have to compete with similar U.S. products. Do you drop your price and lower your margins? Or do you maintain the higher price because your product is better?
What's interesting is that some global companies—not U.S. based—have actually outperformed. The market is looking at this from a different angle: that the U.S. may suffer the most. The purchasing power of the consumer is essentially being taken away again. We saw it with inflation, and the same principle applies here. Consumer purchasing power—70% of the U.S. economy—is now impacted because they'll be paying more for goods.
ANNA
As we discussed in the intro, companies like Apple have operated in East Asia for decades, manufacturing a lot of their products there. Apple has committed to spending $500 billion to establish U.S.-based manufacturing. Is this good for the stock?
BRUCE
They spent years moving away from China, and now they're being tariffed elsewhere. I suspect they'll get some breaks or find ways around these tariffs eventually. In the meantime, there's going to be a lot of volatility. Apple has come a long way off its high.
Consumers want iPhones, and they want them cheap. Apple already said if they moved all production to the U.S., the price of an iPhone would double. Most people don't want to pay that. It's almost a necessity now—everyone has a phone, and everyone upgrades. We're all paying for it.
There's got to be a way around that, and they've already announced reduced or no tariffs on electronics. From an investor's perspective, I'd prefer Apple keep the status quo. They've optimized their supply chain for price and efficiency.
ANNA
Speaking of all this volatility, let's talk about volatility itself. The VIX index is something you look at regularly. As we discussed last time, it's updated throughout the day, right?
BRUCE
Correct.
ANNA
The VIX is referred to as the 'Fear Gauge' or 'Panic Index' on Wall Street. On April 7th, it spiked to 60.13. For perspective, during the 2008 Lehman Brothers crisis, it reached 59.89, and during the COVID market panic in March 2020, it hit around 53–54. So this spike topped those major events. What are your thoughts?
BRUCE
It's the uncertainty—and how dramatically it happened. Portfolios needed to be readjusted to reduce risk, and when they do that, they use options. The volatility of those options spiked. We talked last month about 30 being a high level. We came into the April 2nd tariff announcement at 22. It jumped over 30 and then hit 60.
ANNA
Unreal. And when that goes up, typically the market goes down, right?
BRUCE
For the most part. You don't usually have high volatility and a calm, steadily rising market.
ANNA
We also mentioned the $10 trillion swing in the market over just 10 days. Even if it corrects, someone still sold in that dip—and someone else bought. So there's a change in ownership, and people are getting hurt. That's real, right?
BRUCE
Absolutely. If you held your stock, it dropped, and you sold—someone else now owns it. If it goes back up, they gain, and you don't. You sold and you lost.
ANNA
As a fund manager, these must be interesting times. Do you adapt your strategy?
BRUCE
We don't completely change our strategy, but we become more cautious. We reduce position sizing. If we normally hold 2.5% in a company, we might cut it to 1.5% or even 1.25%. During that first volatile week, we weren't adding anything new. Once the volatility dropped after the pause was announced, we saw some opportunities and started picking away at them.
ANNA
That's impressive. One thing we also saw—and we'll talk about gold and the U.S. dollar next—was the fear surrounding U.S. Treasury bills. We haven't seen that in a very long time. It's one of the safest havens globally, and this exodus shows a lot about investor sentiment.
BRUCE
Historically, when stock markets—especially the U.S.—go down, the U.S. dollar and treasuries are bid up. They're considered safe, and the U.S. dollar is the reserve currency. Treasuries are even safer than cash in some cases and currently offer higher yields.
But now we're seeing the opposite: stock market down, dollar down, and treasury prices down (which means yields up). That tells me foreigners are selling. They're selling stocks, converting dollars, and buying foreign currencies. They're also selling treasuries and repatriating capital.
ANNA
And once they pull that capital, they're not jumping back in overnight.
BRUCE
Exactly. It could have a long-term impact. A lot will depend on future policy. If the U.S. introduces stimulus—tariff resolutions, tax cuts, regulatory changes—the economy might take off, and investors could return. But these capital cycles tend to last. There's a lack of trust now in the U.S. due to the rapid policy shifts. Investors are saying, 'Let me take my capital back and wait.'
ANNA
I've heard people close to the administration say Trump genuinely believes tariffs are a great way to fund the government. So this may not be a tactic—it could be a long-term strategy. We'll see. I'm sure we'll be talking about it again in episode four.
BRUCE
Probably. Stay tuned to see what happens next month.
ANNA
Let's talk about gold prices—something we've followed since the start of the year. Tell us where that's at.
BRUCE
Gold has been one of the best-performing investments over the last year—up close to 40% in 12 months and about 25% year-to-date. People view it as a safe store of value. Some central banks are also buying. It's been a consistent bright spot during all the tariff-driven market volatility.
ANNA
And historically, gold has a negative correlation to the U.S. dollar. That's held up recently?
BRUCE
Yes. Gold performed even when the dollar was strong, but now the dollar has dropped 10% from its high, and gold is accelerating again. If you're a gold investor, this is a great time.
ANNA
Here's what excites me—maybe I'm jumping ahead—but if gold stays at these levels, gold projects could become profitable. That might spark M&A activity. Can you expand on that?
BRUCE
Absolutely. Gold is around $3,200 an ounce. The best mines might have operating costs as low as $600–$700 per ounce. Average producers tend to be in the $1,200–$1,800 range. At current prices, they're making solid margins.
That means projects that weren't viable at $1,000–$1,500 are now economic, even those approaching $2,000 per ounce in cost. These projects will start to move forward. But building a mine takes time due to regulation and permitting. So for majors, it's often cheaper to buy than build. That's why we could see a wave of acquisitions instead of new development.
BRUCE
I suspect that if gold stays up here like it is, you'll start to see some of those companies get picked off—especially given that gold's had a fairly strong move, but you haven't seen the producers rise the same amount you would've expected. A lot of the mining stocks aren't back to their highs, even those we saw in 2020 or 2021.
ANNA
Even though gold is hitting record highs.
BRUCE
Right. Hopefully that's what we start to see. Hopefully it becomes reflective, and hopefully there's a trickle-down that moves into the exploration world—giving those companies the ability to raise more capital and advance their projects. Usually it eventually gets there. That's my hope for all of them.
ANNA
Let's talk about something you've brought up a lot over the years we've been doing this—something people don't always think about. You watch investor sentiment closely, but you also wanted to talk about business sentiment. What's going on there?
BRUCE
With what's happened in the market sell-off, sentiment has really swung from one extreme to the other. We track a few different sentiment indicators. For investor sentiment, we look at the American Association of Individual Investors. They do a weekly review and interview 1,000 people to ask whether they're bullish or bearish on the market. We've actually seen net bears in that survey for the last several weeks, which is interesting. That typically only shows up in very negative markets.
Another key indicator we follow is the National Association of Active Investment Managers in the U.S. They report weekly on how fully invested their members are. In normal markets, they usually sit around 80–90%. Under conditions of high volatility, that number drops. Right now, it's around 50%. If you go back to the 2022 lows or COVID lows, that range was between 30–50%, and we're back there again now. Sentiment has really pulled back into negative territory quickly.
While there's going to be volatility around policy, historically when sentiment hits these levels, it presents longer-term opportunities. If you're a 3–5 year investor, you'll probably look back and say, 'That was a fantastic time to pick something up.'
ANNA
And on the business sentiment side?
BRUCE
That's really interesting too. The National Federation of Independent Business in the U.S. surveys its members. After President Trump was elected, we saw one of the fastest spikes in sentiment in history—only a few other times have we seen a similar rate of ascent. Now, that has reversed. It's dropping off.
Consumer sentiment has also dropped significantly. The last reading before this show was 50.8. In 2022, it dropped to 50. In 2008 and during COVID, it wasn't even that low. That tells us consumers are scared.
ANNA
And for all the talk about this benefiting consumers, people are looking at their everyday goods and realizing those prices may go up 10–20%. That's not comforting after an extended period of inflation.
BRUCE
Right, and there's also a lot of confusion for consumers. If someone needs to buy a car or a new computer right now, they don't know how tariffs are going to affect their purchasing power. It's changing constantly.
ANNA
And I don't think many consumers even realize they're the ones paying. The way it's positioned by the U.S. government makes it sound like the producer pays, but it's actually the country slapping a tax on the product. Unless the manufacturer or a middleman absorbs that cost, the consumer pays it.
BRUCE
Exactly. I saw an article recently about government-subsidized relief being introduced in the UK to help offset those costs. If we start seeing that elsewhere, it could become just as painful in different ways.
ANNA
Let's shift gears. By the time this airs—and before we speak again—we could have a new Prime Minister. Or we might have the same one.
BRUCE
Right. We're going back to the polls on April 28th.
ANNA
So it'll be interesting to see what happens. Whatever the outcome, make sure to get out there and vote. It's really important.
BRUCE
Absolutely—no matter who you're voting for, just vote.
ANNA
Let's talk about some CSE news. It's been an interesting month in the markets, but a fantastic one at the CSE.
One of the big developments is access to Interactive Brokers. This platform has become a global powerhouse—used by firms like CommSec in Australia, which represents 74% of retail trading there. Now, all CSE-listed securities will be available globally through Interactive Brokers. This is a huge leap forward in access for CSE issuers and international investors.
Thank you to our senior management team for pushing this across the finish line, and thank you to Interactive Brokers. We're very excited about this.
We also had some exciting new listings. On Friday, April 11th, SNDL Inc. joined the CSE. They're one of the largest vertically integrated cannabis companies in Canada and the largest private-sector liquor and cannabis retailer in the country. Their retail presence includes major banners like Wine and Beyond, Liquor Depot, Value Buds, and Spiritleaf.
Their cannabis brands include Top Leaf, Contraband, Palmetto, Bond, Jack Lab, and No Future, among others. They're also active in strategic investing across the North American cannabis space.
BRUCE
It gives them access to capital. They've been acquisitive in the past and made lots of strategic moves.
ANNA
Exactly. The companies that have survived in this space are impressive—strong fundamentals, experienced teams, and aggressive but smart growth strategies. Congratulations to them. We're excited to have them with us.
Another new listing is Lithos Group. They're active in clean tech and mining, with patented aqua technology for lithium extraction—sustainable and chemical-free. We haven't talked about lithium in a while, and it's still a well-loved space in the junior markets.
Finally, I want to mention Yukon Metals. They closed a $10 million financing and now have over $17 million in the bank to fuel their drill campaigns across the Star River, Arizona, and Birch properties. This was co-led by CoreMark Securities and Canaccord Genuity—big, impactful names. What are your thoughts?
BRUCE
We're already starting to see money flow into the sector. That's a great example. As returns grow in large-cap stocks, it filters down. People start looking for the next opportunity.
ANNA
Congratulations to their team—it's a great milestone.
As we move into next month, Bruce, what should we be keeping an eye on?
BRUCE
Unfortunately, it's going to be all about U.S. policy. That'll be the big one. Once we get clarity, we'll start to see leadership shifts—when there's a correction like this, new sector leaders often emerge.
ANNA
Absolutely. Always a pleasure, Bruce. I have a feeling our agenda may not change much next month—but we'll see. Thank you again. Looking forward to our next chat.
BRUCE
Thanks. Always great to be here.
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