Europe placates Trump with NATO pledges it can ill afford
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Diverging Reports Breakdown
TSX ends higher as TD Bank beats earnings estimates
Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) ended up 14.84 points, or 0.1%, at 25,854.01. Financials and technology both add 0.6% while materials group falls 0.8% as gold pulls back.TD Bank (TD.TO) reported better-than-expected earnings for the second quarter, powered by strength at its wholesale banking arm. U.S. stocks finished little changed as Treasury yields eased off recent highs after the House of Representatives passed President Donald Trump’s tax and spending bill.
Summary
Companies TSX ends 0.1% higher at 25,854.01,
TD Bank gains 3.2% on earnings beat
Financials and technology both add 0.6%
Materials group falls 0.8% as gold pulls back
May 22 (Reuters) – Canada’s main stock index edged higher on Thursday as technology shares clawed back some of the previous day’s declines and investors cheered Toronto-Dominion Bank’s quarterly results.
The Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) , opens new tab ended up 14.84 points, or 0.1%, at 25,854.01, with the market staying close to the record high that it posted earlier this week on easing global trade uncertainty.
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U.S. stocks finished little changed as Treasury yields eased off recent highs after the House of Representatives passed U.S. President Donald Trump’s tax and spending bill.
“Not saying that we’re out of the woods … but in Canada, we’re in a very low rate environment, inflation has come down dramatically, you’ve got pretty decent earnings,” said Barry Schwartz, chief investment officer at Baskin Wealth Management.
TD Bank (TD.TO) , opens new tab reported better-than-expected earnings for the second quarter, powered by strength at its wholesale banking arm, and said it would lay off 2% of its workforce to cut costs and scale up its digital and AI investments.
Shares of Canada’s second-largest lender gained 3.2%, while the heavily weighted financials sector ended 0.6% higher.
Recent strength in bank stocks is a sign that investors are not expecting a deep economic slowdown, Schwartz said.
“The smart money is saying if there is a recession it may be a technical one, with no real impact on the economy and brighter days are ahead,” added Schwartz.
Technology also rose 0.6%, while the materials group, which includes fertilizer companies and metal mining shares, ended 0.8% lower as gold gave back some of its recent gains.
Reporting by Fergal Smith in Toronto and Sanchayaita Roy in Bengaluru; Editing by Sahal Muhammed, Leroy Leo and Rod Nickel
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TSX pulls back from record high as investors weigh switching into growth stocks
Toronto’s S&P/TSX Composite Index ended down 152.30 points, or 0.6%, at 26,566.32. Consumer staples fell 1.7%, real estate lost 1.4% and utilities ended 0. 6% lower. BlackBerry Ltd (BB.TO) shares rose nearly 13% after the company raised its annual revenue forecast, anticipating steady demand for its cybersecurity services. Canadian 10-year yield was up 4.5 basis points at 3.319% as Canada pledged to invest 5% of its gross domestic product in defense spending by 2035.
Summary
Companies TSX ends down 0.6% at 26,566.32
Consumer staples falls 1.7%
Real estate loses 1.4%
BlackBerry jumps nearly 13%
June 25 (Reuters) – Canada’s commodity-linked main stock index pulled back on Wednesday from a record high, with the consumer staples and real estate sectors among the biggest decliners as investors assessed the potential for calmer market conditions to increase the attractiveness of high-growth stocks.
Toronto’s S&P/TSX Composite Index (.GSPTSE) , opens new tab ended down 152.30 points, or 0.6%, at 26,566.32, after posting a record closing high on Tuesday.
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A heavy weighting in gold stocks, which tend to benefit from safe-haven demand, has helped shield the TSX from some of the volatility that has impacted Wall Street this year but global trade tensions have cooled in recent weeks and a fragile truce between Israel and Iran has continued to hold.
“If things do calm down, I would want to be reducing my exposure to TSX type names and increasing my exposure to growth as there has been significant underperformance in that direction in the last six months,” said Barry Schwartz, chief investment officer at Baskin Wealth Management.
Major U.S. benchmarks, such as the S&P 500, have a heavier weighting than the Toronto market in high-flying technology stocks.
Some of the high-dividend-paying sectors on the TSX lost ground as long-term borrowing costs rose. Consumer staples fell 1.7%, real estate lost 1.4% and utilities ended 0.6% lower.
The Canadian 10-year yield was up 4.5 basis points at 3.319% as Canada pledged to invest 5% of its gross domestic product in defense spending by 2035.
“Planned increases in defence expenditures are likely to lead to significantly larger deficits, higher debt and increased issuance,” Randall Bartlett, senior director of Canadian economics at Desjardins, said in a note.
BlackBerry Ltd (BB.TO) , opens new tab was a bright spot. Its shares rose nearly 13% after the company raised its annual revenue forecast, anticipating steady demand for its cybersecurity services amid growing online crimes.
Reporting by Fergal Smith in Toronto and Sukriti Gupta and Twesha Dikshit in Bengaluru; Editing by Leroy Leo and Diane Craft
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TSX inches higher as Carney-Trump communications feed investor optimism
The Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) ended up 13.29 points, or 0.1%, at 26,342.29. The energy sector rose 0.5% as the price of oil settled 0.8% higher at $63.37 a barrel on optimism about U.S.-China trade talks. Technology was a drag, falling 1.1% with shares of Descartes Systems Group Inc (DSG.TO) down 12.1%. The materials group, which includes metal mining shares, was up 0.4% as copper prices climbed.
Summary
Companies TSX ends up 0.1% at 26,342.29
Trade deficit hits an all-time high in April
Energy rises 0.5% as oil settles 0.8% higher
Descartes Systems Group tumbles 12.1%
June 5 (Reuters) – Canada’s main stock index edged higher on Thursday as higher oil prices boosted energy shares and investors assessed prospects of Canada reaching a trade deal with the United States.
The Toronto Stock Exchange’s S&P/TSX composite index (.GSPTSE) , opens new tab ended up 13.29 points, or 0.1%, at 26,342.29, staying within reach of the record closing high it posted on Tuesday.
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Canadian Prime Minister Mark Carney and U.S. President Donald Trump are in direct communication as part of Ottawa’s bid to persuade Washington to lift tariffs, Industry Minister Melanie Joly said.
“We’re still cautiously optimistic that the TSX finishes at 27,000 for the year,” said Jay Bala, co-founder and senior portfolio manager at AIP Asset Management.
“I do think that Mark Carney is going to have a better relationship with the Donald Trumps of the world and I think he’ll get a (trade) deal done … it makes sense for both countries to get a deal done.”
Canada is a major destination for U.S. goods, while it sends 75% of its exports south of the border. U.S. tariffs hurt demand for Canadian goods in April, which contributed to the Canadian trade deficit widening to an all-time high of C$7.1 billion ($5.2 billion).
The energy sector rose 0.5% as the price of oil settled 0.8% higher at $63.37 a barrel on optimism about U.S.-China trade talks.
The materials group, which includes metal mining shares, was up 0.4% as copper prices climbed.
Technology was a drag, falling 1.1%, with shares of Descartes Systems Group Inc (DSG.TO) , opens new tab down 12.1% after the application software company’s first-quarter results missed estimates.
Reporting by Fergal Smith in Toronto and Sanchayaita Roy in Bengaluru; Editing by Shreya Biswas, Vijay Kishore and Nia Williams
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Russian GDP up 1.4% in March, economy ministry says
Russia’s gross domestic product (GDP) grew by 1.4% in March year-on-year. GDP grew by 0.7% in February, the economy ministry said on Wednesday. For the first quarter this year, GDP growth was 1.7%.
MOSCOW, April 30 (Reuters) – Russia’s gross domestic product (GDP) grew by 1.4% in March year-on-year after expanding by 0.7% in February, the economy ministry said on Wednesday.
For the first quarter this year, GDP grew by 1.7% in year-on-year terms compared to growth of 5.4% in January-March 2024, the ministry said.
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Economists in a Reuters poll said they see growth slowing to 1.6% in 2025, down from 4.3% in 2024.
The economy ministry forecast 2025 annual growth of 2.5%, compared with a central bank prediction of 1-2%.
Editing by Andrew Osborn
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Europe placates Trump with NATO pledges it can ill afford
NATO’s European members have promised to more than double the amount of wealth they set aside for military spending. Most can ill-afford to spend 5% of output on defence – so there will be some creative accounting to divert existing spending to the effort. “They will not get there,” Guntram Wolff, senior fellow of the Bruegel think-tank, said of the 5% goal. “The potential losers are not just future generations saddled with huge debts, but today’s societies,” said Nick Witney at the European Council on Foreign Relations. “Disgruntled populations, whose sense of economic wellbeing has never recovered from the global economic crash of 2008, will likely become even easier prey for populist or nationalist politicians gathering strength across Europe,” Witney said. “There will still be a sizeable welfare state but perhaps less generous,” said Wolff. ” The conversations on defence-related measures will sound strikingly different to those that were in the run-up to the gathering,” he said.
Item 1 of 2 NATO Secretary General Mark Rutte and Dutch Prime Minister Dick Schoof pose for a family photo with NATO leaders during a NATO leaders summit in The Hague, Netherlands June 25, 2025. REUTERS/Claudia Greco
Summary New 5% spending target seen unrealistic for most
Leeway exists in how to define defence spend
But some cuts will need to be made elsewhere
LONDON, June 25 (Reuters) – In their rush to retain Donald Trump’s support for NATO, the alliance’s European members have promised to more than double the amount of wealth they set aside for military spending.
The snag is that most can ill-afford to spend 5% of output on defence – so while there will be some unpalatable sacrifices in national budgets, there will also be some creative accounting to divert existing spending to the effort.
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“They will not get there,” Guntram Wolff, senior fellow of the Bruegel think-tank, said of the 5% goal.
“If you are a highly indebted country you can’t issue more debt, it means very difficult budgetary choices,” he said of the hefty tax hikes or spending cuts that it would require.
As a piece of political theatre, the Hague summit at least won over its intended audience: Trump himself. Amid concerns about his commitment to NATO’s mutual defence clause, he said the United States stood with its European allies “all the way”.
While few dispute that Europe needs to do more to ensure its own security as tensions with Russia rise, the fixation on the 5% target cut short a separate debate about how it could be using its existing military budgets more efficiently, for example with national governments agreeing on joint procurement.
Now it has saddled itself with pledges which – with the notable exception of Germany, whose finances are solid after years of fiscal frugality – most members will find hard to keep.
To hit the 5% threshold, European Union countries, whose debt pile already tops 80% of output, would between them have to nearly triple the 325 billion euros ($377 billion) they spent on defence last year to more than 900 billion.
Non-EU Britain – whose debt is 100% of output and which already pays more in debt servicing than for every spending item apart from health – would need an extra 30 billion pounds ($41 billion).
“The potential losers are not just future generations saddled with huge debts, but today’s societies,” said Nick Witney at the European Council on Foreign Relations.
“Disgruntled populations, whose sense of economic wellbeing has never recovered from the global economic crash of 2008, will likely become even easier prey for populist or nationalist politicians gathering strength across Europe.”
Chart depicting countries’ defence spending in 2024 as % of GDP
Bar chart showing NATO country spending in 2024
Heatmap showing on what programmes OECD governments spend money as a percent of GDP
A line chart showing current and projected defense spending as a share of GDP for the US and rest of NATO based on new commitment to reach 5% by 2035
GUNS OR BUTTER?
To be sure, the closer a country sits next to Russia, the less domestic angst there is about finding the extra cash – Poland, the Baltics and Finland are all cases in point. Years of rivalry with neighbouring Turkey have meanwhile attuned Greek public opinion to accept higher defence spending.
But Spain’s Socialist Prime Minister Pedro Sanchez – whose country is alone in not expressly signing up to the new target – voiced the concerns of others when he said the goal was “incompatible with our welfare state”.
Slovakia, one of the central European countries whose budgets face the greatest strains from the defence build-up, has also baulked at the target, arguing that raising living standards and cutting its borrowing were equally important.
Bruegel’s Wolff said it remained to be seen whether countries increase their defence quotas by shaving the odd billion here and there off other areas, or whether big-ticket areas such as pensions take a sizeable hit.
“But keep it in proportion – there will still be a welfare state but perhaps less generous,” he said of social protections across Europe that can account for anything up to 30% of the economy.
As leaders depart the Hague summit venue, the national conversations on defence will sound strikingly different to those that were had in the run-up to the gathering.
The 5% breaks down into 3.5% to be spent on “core” defence – troops and weapons – and 1.5% on defence-related measures such as adapting roads and bridges to handle military vehicles. The room to wedge existing spending items into the second category will likely prove generous.
In France, for example, there is discussion about whether that could include the gendarmes policing country lanes, who are formally part of the defence ministry but whose existing running costs currently lie outside the defence cost tally.
The long deadlines aired for hitting the target – in some cases up to a decade – are also an opportunity for those pledges to be fudged as the political spotlight shines elsewhere.
“Spending goals will simply be missed,” said Witney. “The transformation required will begin to take shape, but less rapidly and less coherently than if more realistic targets had been set.”
($1 = 0.7344 pounds)
($1 = 0.8613 euros)
Writing by Mark John; additional reporting by Jan Strupczewski in Brussels; Leigh Thomas in Paris; Maria Martinez in Berlin; William Schomberg in London; Eleftherios Papadimos in Athens; Anne Kauranen in Helsinki; Simon Johnson in Stockholm; Gergely Szakacs in Budapest; Jan Lopatka in Prague; Editing by Alex Richardson
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