CHF WEEKLY ROUND-UP: May 19-23, 2025

It was a shortened trading week in Canada and coming up in the U.S. this will be a three-day Memorial Day holiday weekend. Global markets had been experiencing gains throughout the month, starting the week on a positive note. However, they encountered a wave of volatility as the week progressed. Late last Friday, Moody's Investment Service joined other credit rating agencies in downgrading U.S. debt from Aaa to Aa1, limiting some safe money funds from investing in America. We are about halfway through the 90-day pause on full tariff implementation and progress has been difficult, China did get its own 90-day window, and the UK got an agreement, but few other announcements have come with no news on progress with the important trading partners Canada and Mexico. Earlier the President had advised the country's largest retailers to "eat the tariffs" despite their very thin profit margins. Overnight, U.S. President Trump said that he is recommending a straight 50% tariff on goods from the European Union starting on June 1, re-escalating trade tensions.

The TSX reached a new all-time high mid-week, even as it was being suggested that Canada was not a good place to invest due to continued high deficits and excess government debt. The latest economic forecasts from the big banks all suggest that Canada could be heading towards a recession this year. The Bank of Canada and the Government are facing a trade war, and a tariff war that is affecting both inflation and unemployment in negative ways.  Signs that underlying inflation was picking up in April have put the Bank of Canada in a tricky position ahead of its June interest rate decision, with some economists arguing a second straight pause is now more likely. Statistics Canada reported a slowing in the annual inflation rate to 1.7 per cent in April from 2.3 per cent in March, but that was short term effect, largely due to the reduction in the consumer carbon tax.

Following a month of gains U.S. equity markets suffered its sharpest one-day decline in a month on Wednesday after a spike in the yields on the 10-year U.S. Treasury to just below the 4.6% mark, and the 30-year Treasury yield to 5.08% weighed on investor sentiment. Both stock and bond investors may be starting to get jittery over the federal deficits and debt implications of Trump's "Big Beautiful Bill" as it moves to the Senate. The debt is up to a record $36.2 trillion. The U.S. dollar (USD) fell back to the level it was at the end of April, even as bond yields rose. The Federal Reserve meeting is three weeks out and it is unlikely the Fed will cut rates in the near term. 

Gold, after an 11% correction from an all-time high at USD$3,500/oz, moved above initial resistance level at USD$3,300/oz this week, opening today at USD$3,343/oz. Geopolitical concerns, a growing risk of a U.S. sovereign debt crisis, and evidence of stagflation setting in during an ongoing trade war have been the principal drivers for gold becoming the safe-haven of choice, and with so much uncertainty in financial markets, the risks are skewed to the upside. More bullish modelling sees gold prices reaching USD$4,000 an ounce by the first quarter of 2026. Silver is being written off by some as no longer being an investment metal since it seems unable to break through the USD$34.00/oz level, opening today at USD$33.04/oz. M&A activity continues, hang onto your precious metals and related shares.

Base and industrial metal prices have been flat through the month and still reflect the front loading of materials orders caused by the tariffs, taking advantage of the currently reduced rates on China-sourced metal. Copper prices dipped to USD$4.65/lb as traders remained concerned about the sustainability of the recent U.S.-China tariff truce.

Critical, battery and electric material prices continue to be weak with lithium slumping below USD$9.00/kg in an oversupplied market and cobalt flatlined at USD$13.28/lb. Sources of supply of critical minerals are increasingly concentrated in just a few countries, most notably China, leaving the global economy vulnerable to sudden supply cutoffs that could disrupt industry and hit consumers with higher prices. More importantly China is the leading refiner for 19 out of 20 strategic minerals and has an average share of around 75% of these commodities.

We are pleased to present our round-up of client news released between May 19-23, 2025.

Technology 

On May 22, 2025, Visionstate Corp. (TSXV: VIS) reported a growing surge in demand for its WandaLITE solution, driven by Ontario’s newly passed Bill 190 legislation, which mandates the display and tracking of restroom cleaning schedules in public-facing businesses and institutions. The legislation will affect tens of thousands of businesses across Ontario and represents a significant shift toward transparency and accountability in public hygiene. With enforcement expected to tighten through the remainder of 2025. Adoption is already underway, with a major Ontario municipality and a large hospital among the first organizations to implement the WandaLITE platform. 

“The response has been overwhelming,” said Shannon Moore, President of Visionstate IoT Inc. “We are booking back-to-back demos with businesses across Ontario, from national retailers to local facilities that need to comply quickly and cost-effectively. WandaLITE was built for exactly this type of mandate.” 

According to industry estimates, there are more than 100,000 commercial and institutional restrooms in Ontario that fall under the scope of Bill 190. Visionstate believes this legislation will set the precedent for similar regulations across other Canadian provinces, particularly in sectors such as healthcare, education, and transportation. With an annual fee of $960 per installation, the potential revenue impact for Visionstate is substantial. Given the simplicity of implementation, Visionstate is poised to on-board thousands of customers by December 31, 2025, ahead of Bill 190 coming into full effect on January 1, 2026. The Company is targeting 1,000 installs by the time the legislation comes into effect.