Kicking Off 2025
After wrapping up a disappointing December and saying goodbye to 2024, it’s a great time to look ahead to 2025 with fresh optimism. January is when many of us take stock (pun intended 😉) of our portfolios, set new financial goals, and strategize for the year to come (OK, maybe not too much strategizing). The markets had their ups and downs in 2024, as in all years, but the start of a new year always brings the potential for fresh opportunities and lessons learned.
Historically, January has been considered a favorable time to invest, with the “January Effect” often driving a boost in stock prices, especially for smaller companies. The “January Effect” is likely due to factors like investors putting money to work after year-end tax adjustments or simply a renewed sense of optimism as we turn the page to a new year. While January does tend to bring some positive momentum, it’s important to remember that timing the market is tricky, and the best strategy for long-term success is often sticking to a disciplined approach. So, whether you’re adjusting your strategy or just reviewing your portfolio, January is a great time to reset and set the tone for a productive year ahead.
With that in mind, let’s take a closer look at what’s been happening in the markets this past week.
Items that may only interest or educate me ….
Canadian Economic news, US Economic news,
Canadian Economic news
This past week’s key economic data that the Bank of Canada (BoC) considers when deciding whether to raise or lower the interest rate.
Labour Force Survey (LFS) and the Job Vacancy and Wage Survey (JVWS)
Statistics Canada’s Labour Force Survey for December revealed that the Canadian labour market ended 2024 on a strong note, with a surprising addition of 91,000 jobs—far exceeding expectations of 25,000 and well above November’s 51,000. This marks the largest monthly gain in nearly two years.
The positive momentum continued with the unemployment rate falling to 6.7%, down from 6.8% in November and beating expectations. While the monthly unemployment rate dropped by 0.1%, it was up 0.9% compared to the same time last year.
On the downside, the annual pace of wage growth slowed to 3.8% from 4.1% in November, the slowest growth rate since May 2022. While workers may not be thrilled with slower wage growth, this decline could ease inflationary pressures, as businesses are less likely to pass on rising labour costs to consumers.
The report exceeded analysts’ expectations, suggesting to a strengthening labour market. However, it will take several more months of consistent job growth to confirm a fully healthy economy. While the positive data is encouraging, it could lead to a slower pace of interest rate cuts than many analysts had predicted. For us investors, this means that those hoping for cheaper borrowing costs or a quicker drop in rates might have to adjust their expectations.
Canadian market volatility
Canada’s Volatility Index (VIXC) had a relatively calm week, opening at 11.5 and closing slightly higher at 11.7. However, there were a few spikes above 16 on the last day of the week following the release of Canadian and US labour data, reflecting brief moments of heightened uncertainty.
Tracked under the ticker VIXI on the Toronto Stock Exchange (TSE), the VIXC measures investor expectations for market volatility. A reading below 10 signals a calm, stable market, while numbers between 10 and 20 indicate typical market fluctuations with moderate volatility. When the index rises above 20, it reflects increased uncertainty and the potential for a bumpier ride ahead.
US Economic news
This past week’s key data points that the Federal Reserve (Fed) considers when deciding whether to raise or lower the interest rate.
FOMC minutes
At its December 17–18 meeting, the Federal Open Market Committee (FOMC) lowered interest rates by 0.25%, bringing the target range to 4.25%–4.5%. This was the third cut of the year, aimed at stimulating economic growth and supporting the job market. Lower interest rates make borrowing cheaper—think lower payments on loans or credit cards—which can encourage spending and investment.
The Fed also signalled a cautious outlook for 2025, projecting just two rate cuts as uncertainty looms over how incoming President Donald Trump’s policies might affect inflation. This suggests the Fed plans to move more gradually, keeping rates higher for longer. Such a stance could weigh on growth-oriented companies or heavily indebted firms, as elevated borrowing costs continue to add pressure. While inflation showed a slight uptick in the short term, long-term expectations remained stable. Meanwhile, stock prices largely shrugged off the presidential election, reflecting a wait-and-see approach from investors. The Fed’s updated forecasts point to stronger economic growth, higher inflation, and a lower unemployment rate in the year ahead.
Additionally, the Fed discussed its balance sheet—the funds it holds and manages—now expecting the reduction process to finish by June 2025. Globally, central banks in advanced economies are projected to continue lowering rates next year, but uncertainty looms over how monetary policies will evolve in the face of shifting economic conditions.
Labour data
The latest reports from the Job Openings and Labor Turnover Survey (JOLTS), the ADP Employment Report, and the Employment Situation Summary (ESS) provide a snapshot of the US labour market, highlighting both its strength and potential challenges.
JOLTS
The November JOLTS report showed 8.1 million job openings, exceeding expectations and October’s upwardly revised 7.8 million. This translates to more than 1.1 job openings per unemployed worker, signalling a robust job market.
While this is great news for job seekers, it’s a double-edged sword for us investors. A strong labour market makes the Fed less likely to cut interest rates soon, as they remain focused on keeping inflation in check. So, while job prospects are solid, those waiting for lower borrowing costs may need a bit more patience.
ADP
The ADP National Employment Report for December revealed private payroll growth of 122,000 jobs, falling short of the 140,000 expected and below November’s 146,000. Education and health services led the charge, adding 57,000 jobs, while manufacturing struggled, shedding 27,000 positions—the steepest drop among sectors.
On wages, private sector pay for those staying in their roles rose by 4.6%, the slowest pace since July 2021. This suggests the labour market is holding firm despite signs of cooling in some areas, but it also hints at potential headwinds for certain industries in a slowing economy.
ESS
December’s ESS delivered a pleasant surprise, with 256,000 jobs added—the largest gain since March 2024—well above November’s 212,000 and crushing the 160,000 projection. The unemployment rate dipped to 4.1% from November’s 4.2%, marking its seventh consecutive month within this tight range and coming in better than expected.
On the wage front, average earnings grew 0.3% in December, matching expectations but easing from November’s 0.4% increase. Year-over-year, wages climbed 3.9%, just below the 4.0% pace of the prior two months. While the labour market’s strength is encouraging, the moderation in wage growth adds a layer of complexity for inflation watchers as the new year gets underway.
Summary
The US labour market remains robust, but signs of strain are appearing in sectors like manufacturing, reflecting the broader economic slowdown. While cooling wage growth could ease inflation concerns, the strong job creation and tight labour supply suggest the Fed will likely maintain the current rate of 4.5% for the next few months.
The strong job gains bring relief to households and businesses but could raise concerns for investors and those hoping for another rate cut. The data effectively rules out an interest rate cut at the Fed’s upcoming meeting on January 28-29 and lowers the likelihood of a cut at their March meeting.
Consumer Sentiment Index (CSI)
The University of Michigan’s preliminary CSI for January came in at 73.2, slightly below expectations of 74. This marks a 1.1% decline from December’s reading of 74.0 and a notable 7.3% drop from January 2024, when it stood at 79.0. This latest figure breaks a six-month streak of improving consumer sentiment.
Breaking down the subcomponents, the Current Economic Conditions Index—which reflects how consumers view their present financial situation—climbed to 77.9, marking a 3.7% increase from December. However, it remains 4.9% below January 2024’s level of 81.9. On the other hand, the Expectations Index, which gauges consumers’ outlook for the future, dropped to 70.2, down 4.2% from December and 8.9% year-over-year. This divergence between present and future expectations reflects the impact of falling rates and easing inflation at the end of the year. However, growing concerns about inflation’s persistence—or even the potential for it to worsen—have weighed on future sentiment, tempering optimism for the months ahead.
American market volatility
The CBOE Volatility Index (VIX), often referred to as the market’s ‘fear gauge,’ opened the week at 16.8 and saw increased volatility as the week progressed, closing at 19.5. This uptick was fueled by a spike above 20 following the release of the latest US employment data.
For context, the VIX measures expected market volatility over the next 30 days. Readings below 12 signal a calm market, while values between 12 and 20 reflect normal market fluctuations. When the VIX rises into the 20-30 range, it indicates heightened investor anxiety, and anything above 30 typically signals market stress, often foreshadowing major turbulence or even a crisis
Weekly Market and Portfolio Review
For the week, the TSX (SPTSX) shrunk by 1.2%, the S&P 500 (SPX) fell 1.9%, the DJIA (INDU) shed 1.9% and the Nasdaq (CCMP) dropped 2.3%.
| Index | Weekly Streak |
| TSX: | 1 – week losing streak |
| S&P: | 2 – week losing streak |
| DJIA: | 2 – week losing streak |
| Nasdaq: | 2 – week losing streak |
The first full week of trading in 2025 was tough for all four major indexes, as shown in the weekly progress chart above.
In December, the Fed took on the role of the Grinch for investors, dashing dreams of lower borrowing costs, rising stock prices and lowered investor sentiment. Unfortunately, this sentiment seems to have spilled over into January, causing all four indexes to finish the week sharply lower.
In the US, fears of “higher for longer” interest rates, coupled with concerns over persistent inflation—or worse, rising inflation—kept markets under pressure. Initial optimism about an incoming US administration promising tax cuts and regulatory rollbacks quickly faded as worries over potential inflationary impacts from tariffs took center stage. A much stronger-than-expected labour report at the end of the week further fueled the sell-off, with investors taking some profits while they weighed the reports implications for the Fed’s interest rate policy. Still, a member of the Fed offered a silver lining, stating, “The economy is in a good place. It’s growing strongly, and the labor market is at full employment.” The strong economic backdrop provides the Fed some leeway to observe how President Trump’s policies play out before making moves.
In Canada, the TSX slipped from its December peak after an impressive 18% gain in 2024. The Fed’s “higher for longer” messaging, coupled with the threat of 25% US trade tariffs and strong labour reports in both Canada and the US, has reignited inflation concerns. A bright spot was the increase in oil prices, which recorded their third straight weekly gain.
This wasn’t the start to the year I envisioned once professional investors returned to the markets. Hopefully, this bout of market turbulence will prove to be just a brief setback. As always, though, opportunities can be found even within the chaos. 😊
| Portfolio | Weekly Streak |
| Portfolio 1: | 1 – week losing streak |
| Portfolio 2: | 1 – week losing streak |
| Portfolio 3: | 1 – week losing streak |
The first full week of trading wasn’t just a bust—it was a disappointing start for my three portfolios. As the chart below shows, all three dropped at least 2% last week. The silver lining? There was none. ☹
Portfolio 1 saw the largest percentage of weekly gainers, with 31% of its holdings in the green. However, it also posted the biggest overall decline. Nvidia (NASD: NVDA) kicked off the week with a record high but ended down 3%, weighing heavily on the portfolio.
Portfolio 2 also had a rough time, with just 15% of its companies eking out a weekly gain—the lowest percentage across the portfolios. Interestingly, the energy sector came to the rescue here. I’d been considering trimming my exposure to oil and gas, but most of the week’s gainers were energy companies benefiting from rising oil prices. Good thing I procrastinated. 😊
With only 23% of its holdings posting gains, Portfolio 3 could be seen as either the second-best or second-worst performer of the three portfolios, depending on your perspective. However, there’s no denying it suffered the second-largest drop in value among the three portfolios and four indexes.
To borrow from Marvin the Martian, “Not a good week, not a good week at all.” The overall market struggled, and as the saying goes, an ebbing tide lowers all boats. It’s no surprise the portfolios drifted lower along with the broader market. After stumbling out of the gate, here’s hoping the tide turns, and things start to improve from here. 😊
Companies on the Radar
Over the holiday break, a number of exciting companies made their way onto my radar. With the fresh start of a new year, I thought it would be a great time to kick off the first radar list of 2025 with a mix of new companies, along with a familiar face from the previous list and one company making a return after last being featured on May 31, 2024.
The company that’s staying on the list is Rubrik, Inc. (NASD: RBRK), a large-cap American player in the fast-growing cybersecurity sector. Making a comeback after a long break is Evolution AB (OTCM: EVVTY), the Swedish giant known for providing live casino solutions to global gaming operators.
Joining the list are:
- Kendryl Holdings, Inc. (NYSE: KD): This mid-cap (a market value between $2 billion and $10 billion) American company, spun off from IBM in 2021, specializes in global IT infrastructure services. Kendryl focuses on modernizing and transforming enterprise IT systems, helping businesses manage the increasingly complex digital world.
- Kraken Robotics Inc. (TSE: PNG): A small-cap (a market value less than $2 billion) Canadian marine technology innovator, Kraken is making waves 😊 in the world of underwater robotics, providing cutting-edge sonar, optical sensors, and equipment for both military and commercial applications.
- Kenvue Inc. (NYSE: KVUE): A large-cap (a market value greater than $10 billion) American consumer health company, spun off from Johnson & Johnson in 2023. Kenvue is behind household names like Tylenol and Band-Aid, offering a wide range of health products with which you are probably familiar.
- Astera Labs, Inc. (NASD: ALAB): A large-cap American semiconductor company that’s making a mark with its purpose-built connectivity solutions, powering AI and cloud infrastructure.
- RxSight, Inc. (NASD: RXST): A mid-cap medical technology company that’s reshaping the way cataract surgery patients experience vision. RxSight specializes in adjustable intraocular lenses, allowing for better post-surgery outcomes.
As always, these are not buy recommendations – be sure to do your own research and make decisions that align with your personal financial goals!
The Radar Check was last updated January 10, 2025.
Portfolio Update
Portfolio 1
Portfolio 1 for the week ended January 10, 2025: DOWN 
- Amazon’s (NASD: AMZN), Amazon Web Services, announced they planned to invest US$11 billion to expand their datacentre infrastructure in Georgia to support their cloud computing and AI technologies.
- At the 2025 Consumer Electronics Show (CES), Nvidia unveiled an impressive new desktop computer powered by their cutting-edge “Blackwell” AI chip, set to hit the market at a price of US$3,000. This machine also features a brand-new central processor co-developed with MediaTek, their partner in their DIGITS project.
- Liberty Media’s Formula One (NASD: FWONK) named veteran sports executive Derek Chang as president and chief executive officer (CEO), effective Feb. 1, replacing long-time CEO Greg Maffei who stepped down at the end of 2024.
Activity
Sold: Pinterest (NYSE: PINS) I first invested in Pinterest back in January 2020, adding to my position a year later. Initially, things looked promising, but by 2021, the share price began to slide and settled into the $20–$40 range by late that year. Over the past five years, the stock has remained in that price range and has failed to deliver meaningful growth. During this time, Pinterest has grappled with slowing user growth and struggled to effectively monetize its platform. Compounding these challenges, the company faces fierce competition from social media giants like Instagram, TikTok, and Facebook, which not only boast larger user bases but also offer similar features. After watching my investment in Pinterest stagnate and with my goal to streamline this portfolio, it feels like the right time to move on.
Sold: Innovative Industrial Properties Inc. (NYSE: IIPR) I first invested in Innovative Industrial Properties Inc. in October 2018 as part of a basket of cannabis-related stocks, aiming to capitalize on Canada’s cannabis legalization. The stock soared, and I added more shares in October 2021—unfortunately, near its peak. Since then, the share price has steadily declined to around $100. While I sold my initial investment for a healthy profit, I held onto a few shares for the generous 11% dividend.
However, IIPR’s third-quarter results in November raised red flags. The share price dropped nearly 30% after missing revenue and funds from operations estimates. On closer inspection, I learned one of IIPR’s largest tenants had defaulted on rent for six of its eleven properties, and IIPR is now facing a stock fraud lawsuit.
The cannabis industry continues to face headwinds, with many companies struggling to stay profitable. If one major tenant is in trouble, others could follow. With lost revenue, legal challenges, and ongoing struggles in the sector, I decided it was time to exit IIPR. I’ll miss the 11% dividend, but I’d miss further share price declines even more. 😊
Dividends
Cash Dividends Received the past three weeks for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Canadian National Railway (TSE: CN)
Tourmaline Oil Corp (TSE: TOU)
US $
Walmart (NYSE: WMT)
Skyworks Solutions (NASD: SWKS)
Nvidia Corp (NASD: NVDA)
Quarterly Reports
No quarterly reports this past week.
Portfolio 2
Portfolio 2 for the week ended January 10, 2025: DOWN
- The Walt Disney Company (NYSE: DIS), Fox Corp (NASD: FOX) and Warner Bros. Discovery (NASD: WBD) dropped their plan to create a giant sports streaming service in the face of legal opposition. While Disney had removed FuboTV’s (NASD: FUBO) objection after purchasing a majority stake in Fubo and merging it with their Hulu+ unit, opposition from other large companies remained for the proposed sports streaming service.
- The Bank of Nova Scotia (TSE: BNS) announced they planned to sell their operations in Colombia, Costa Rica and Panama to Colombian bank Davivienda (BVC: PFDAVVNDA). BNS will receive a 20% interest in Davivienda as BNS continues to consolidate and focus on their North American operations.
Activity
No significant activity to report this week.
Dividends
Cash Dividends Received the past three weeks for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Brookfield Infrastructure Partners (TSE: BIP.UN) DRIP
Brookfield Infrastructure Partners Corp. (TSE: BIPC)
iA Financial Group (TSE: IAG)
Tourmaline Oil Corp. (TSE: TOU)
Canadian Natural Resources (TSE: CNQ)
US $
No US$ dividends this past week.
Quarterly Reports
No quarterly reports this past week.
Portfolio 3
Portfolio 3 for the week ended January 10, 2025: DOWN
- Microsoft (NASD: MSFT) plans to invest US$3 billion over two years to build out India’s cloud and AI capabilities. This is on top of the US$80 billion the company plans to invest in AI enabled datacentres in 2025.
- Lithium Americas (TSE: LAC) now expects a reserve estimate of 14.3 million tonnes (Mt) of lithium carbonate, an increase of 286% from the original estimate. LAC’s Thacker Pass mine is now the largest measured lithium reserve and resource in the world.
Activity
No significant activity to report this week.
Dividends
Cash Dividends Received the past three weeks for the following companies:
Canadian $
Brookfield Corporation (TSE: BN)
Brookfield Renewable Partners (TSE: BEP.UN)
Brookfield Asset management (TSE: BAM)
US $
No US$ dividends this past week.
Quarterly Reports
No quarterly reports this past week.