Dear valued client,
** Please note RRSP season is just around the corner. If you would like to get together in the New Year to discuss your tax situation for 2024, please get in touch with me. **
Markets finished in the green again this week following a U.S. jobs report showing a stronger-than-expected increase of 227,000 jobs, surpassing economists’ forecast of 214,000 and significantly exceeding the revised October figure of 36,000. The disparity between October and November figures reflects the impact of severe weather in the Southeast and temporary labor disruptions. The unemployment rate rose slightly to 4.2%, aligning with expectations and up from 4.1% in October. President-elect Trump has threatened to impose 100% tariffs on BRICS countries — Brazil, Russia, India, China, and South Africa — if they move to establish an alternative currency challenging the U.S. dollar’s dominance. BRICS, an informal coalition of emerging economies formed in 2009, has expanded to include nations like Argentina, Iran, and the UAE. Russia, particularly under President Vladimir Putin, has been vocal about reducing reliance on the dollar, citing its use by Western nations to impose sanctions. However, the U.S. dollar remains deeply entrenched in the global financial system, representing 58% of the world’s foreign exchange reserves and dominating commodity trade. Despite BRICS’ growing economic clout, experts see little immediate threat to the dollar’s supremacy, as internal divisions within BRICS hinder the development of a viable alternative.
Canadian Prime Minister Justin Trudeau met with U.S. President-elect Donald Trump at Mar-a-Lago for a surprise dinner meeting at the beginning of the week, which Trudeau described as “productive.” The discussion came shortly after Trump threatened to impose 25% tariffs on Canada and Mexico, citing concerns over fentanyl and migrant influxes into the U.S. Trudeau expressed frustration over Canada being equated with Mexico, as U.S. border officials seized 43 pounds of fentanyl at the Canadian border last fiscal year compared to 21,100 pounds at the Mexican border. With the U.S. being a critical market for Canada’s oil and auto industries, Trudeau is expected to make significant efforts to avert these tariffs.Investment giant BlackRock has made a bold move into private credit by acquiring HPS Investment Partners in a $12 billion all-stock deal. The acquisition adds nearly $150 billion in assets under management to BlackRock’s portfolio, increasing its alternative assets by 25%. This marks a strategic pivot for BlackRock, which had been slow to embrace alternative investments, as private credit becomes a rapidly growing market projected to double to $3 trillion by 2026, according to Moody’s. Private credit involves loans from non-bank entities to private businesses, often funded by pension funds, insurance companies, and wealthy individuals, offering high returns due to their typically expensive terms. The sector gained traction following the 2008 financial crisis, as stricter bank regulations created opportunities for non-bank lenders. While private credit continues to attract significant interest, concerns are rising over transparency and valuation practices, with some experts warning of potential risks in the booming market.
French Prime Minister Michel Barnier was ousted by a no-confidence vote just three months after taking the role. The vote came after Barnier bypassed Parliament to force through a budget bill, prompting backlash from both left and right-wing lawmakers. Macron has asked Barnier to serve in a caretaker role while a replacement is found, a challenging task given the lack of a working majority in the lower house. The urgency is heightened by President-elect Trump’s upcoming visit to Paris for the reopening of Notre-Dame Cathedral, making the absence of a stable government particularly awkward on the international stage.
Australia has passed the world’s strictest law on social media use for children, banning those under 16 from having accounts. The legislation, aimed at protecting youth from online harms, requires social media companies to take “reasonable steps” to prevent underage users from accessing their platforms within the next year. Companies that fail to comply could face fines of up to $32 million, though no penalties will be imposed on underage users or their parents. Critics argue that the law was rushed, lacks consideration of unintended consequences, and will be difficult to enforce due to tools like VPNs that can bypass restrictions. “Social media has become the crack cocaine of the digital world.” – Simon Mainwaring
Have a terrific weekend,
PW
