Many Canadians are happy to swap their California Cabernet for a Niagara Pinot Noir, but when it comes to their portfolios, they’re not bailing on the U.S.
Driving the news: Despite consumer backlash over Trump’s tariff war, Canadian investors have been buying U.S. stocks at a record pace since the president took office. In May, Canadians bought $14.2 billion in American stocks, up 377% from the same month last year.
- Back in February, the same month that Trump first imposed 25% tariffs on Canadian goods, investors poured a record $29.8 billion into U.S. equities.
Why it matters: Canadians have been adamant about boycotting U.S. products and summer vacations south of the border, but when it comes to the marketplace with the most financial firepower, the Buy Canadian movement has taken a backseat.
Big picture: While Canadians fill their portfolios with U.S. assets, foreign investors — spooked by the impact of tariffs — have been fleeing the Canadian market. In the first five months of the year, when Canadians pumped $59.9 billion into U.S. securities, Canada’s economy saw a net outflow of $83.9 billion.
- It’s the first time on record that foreign investors were not net buyers of Canadian portfolio assets in the first five months of the year.
Yes, but: Even with the cash outflows, Canada’s main stock index fared pretty well. So far this year, the TSX has outperformed the S&P 500, Nasdaq, and Dow Jones.—LA