Below, you will find our monthly market update and relative information that pertains to the current state of the economy.

Market Update

• Market indices ended the month with mixed performance, with some finishing higher while others closed lower.
  • • The S&P 500 finished at 7,499.36 pts (-1.06%)
    • The DOW finished at 52,319.20 pts (+2.52%)
    • The NASDAQ finished at 26,213.72 pts (-2.81%)
    • The TSX finished at 34,856.99 pts (+0.25%)

Canada

Monetary Policy

• On June 10^th, The Bank of Canada (“BoC”) decided to leave the overnight lending rate unchanged.
  • Currently, the overnight rate is 2.25%, the Bank Rate is at 2.50%, and the deposit rate is at 2.20%.
  • “Governing Council decided to maintain the policy rate at 2.25%.  Economic activity in Canada has been weak and uncertainty about US trade policy persists. The conflict in the Middle East is ongoing, and oil prices remain elevated. Governing Council is continuing to look through the war’s near-term impact on headline inflation but will not let higher energy prices become persistent inflation. As the outlook evolves, we stand ready to respond as needed. The Bank is committed to maintaining Canadians’ confidence in price stability through this period of global upheaval.”
  • The next interest rate announcement for 2026 will take place on July 15^th.

Economic Data

• The Canadian economy added 87,800 jobs in May. This was well above economist expectations of 10,000 job gains.
• Canada’s unemployment rate rose to 6.6% in May from 6.8% in the previous month.
• Statistics Canada reported that Canada’s inflation rate rose to 3.2% in May, up from 2.8% in April, which was the fastest pace of price growth since December 2023.
  • The biggest driver was gasoline, with prices rising by 33.2% compared to a year ago. Supply uncertainty stemming from the conflict in the Middle East continued to push energy costs higher for Canadian consumers.
  • Core measures, which exclude more volatile items, held firm near the Bank of Canada’s (BoC) 2% target, suggesting that price pressures have not yet spread broadly through the economy.

U.S.

Monetary Policy

• The Fed decided to leave the target range for the federal funds rate unchanged in its June meeting.
  • The target range for the federal funds rate is 3.50-3.75%.
• “The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve’s dual mandate. The Committee reaffirmed its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy.”
• The next Fed meeting will take place on July 28^th & 29^th.

Economic Data

• The U.S. annual inflation rate accelerated for a third consecutive month, rising to 4.2% in May from 3.8% in April, which was its highest level since April 2023.
  • Much of the acceleration was driven by the conflict in the Middle East, which has pushed oil and gasoline prices sharply higher, leaving U.S. consumers paying their highest fuel costs in three years.
• The U.S. economy added 172,000 jobs in May, well above analysts’ estimate of 88,000. The unemployment rate held steady at 4.3%.
• May marked the third consecutive month of consensus-beating job gains, reinforcing the U.S. Federal Reserve Board’s (Fed’s) focus on inflation rather than the labour market as its primary policy concern.

Global

• The European Central Bank (ECB) raised its three key policy interest rates by 25 basis points, lifting its deposit rate to 2.25% from 2.00%. This was the ECB’s first-interest rate hike since September 2023.
  • The decision came as inflationary pressures across Europe intensify, largely due to significantly rising energy prices resulting from the conflict in the Middle East.
• China’s exports jumped by more than 19% year over year in May, while imports soared by over 27%. Both readings topped economists’ forecasts.
  • The strength was driven largely by the global investment boom in artificial intelligence (AI). Semiconductor exports rose 111% to US$36 billion, and shipments of computers and parts climbed 66%, their fastest pace since 2010.
• The Bank of England (BoE) kept its policy interest rate unchanged at 3.75%. BoE officials agreed it was not prudent to adjust interest rates at this time given the current level of uncertainty stemming from higher energy prices tied to the conflict in the Middle East.

Notes From our Firm

• Supporting our local community is a key part of our mission and we’re proud to make it on of our core values. Our team has been involved in numerous charitable events over the years, though closest to our hearts is the Wise Guys Charity Fund
  • A 100% volunteer-based operation, the Wise Guys Charity Fund helps raise and disburse funds to countless local charities and community organizations across Niagara.
  • Over the past 30+ years, Wise Guys Charity has raised over $5.8 million with every cent going back into the Niagara community.
  • On July 14th, Wise Guys will be hosting their annual charity auction and dinner. On July 15th, Wise Guys will be hosting the 35th annual charity men’s golf tournament.
• For more information, please visit the Wise Guys Charity Fund’s website by Clicking here.

As always if you have any questions, please feel free to reach out to us. Or, if you know someone who would like an opinion on their investments or insurance, please connect us! There is no better compliment than a referral from one of our current clients.

Yours Truly,

The Team, C.R. Smith Financial

Community, Respect, Service & Financial Integrity