Watch these five numbers to follow the trade war’s impact on your finances and investments
Traders work on the floor of the New York Stock Exchange, on March 5, in New York City.Spencer Platt/Getty Images
You cannot possibly process every piece of data related to your finances in a trade war, so forget about even trying.
Instead, try taking a periodic look at these five essential numbers. They were picked because they offer a double-dose of investor intelligence. What’s happening in a particular market or sector, and what that says about the broader economy and investing environment.
Given that investors tend to heavily emphasize Canadian stocks in their portfolios, the S&P/TSX Composite Index demands your attention. But the U.S.-based S&P 500 is even more more important because it’s the index U.S. President Donald Trump watches closely. If the S&P 500 tanks, it means global investors are censuring his economic policies.
The five-year Government of Canada bond yield
Bond yields are tricky in that they move in the opposite direction of bond prices. If investors are worried about how the trade war will affect economic growth and stock prices, they will pile into bonds in a way that pushes up bond prices and send yields lower. This is exactly what happened Tuesday, as stock markets fell hard. More declines in bond yields would tell us investors see a worsening economy ahead. On the plus side, lower bond yields give banks room to lower fixed mortgage rates.
The unemployment rate in Canada
Statistics Canada’s monthly labour force survey is the definitive guide to the job market, which is in turn the definitive guide to the economic health of the country. GDP is vital, sure. But what matters most is that people are able to find – and keep – work. If the unemployment rate starts to push higher, expect insolvencies to rise and the housing market to fade. Until the trade war started, the job market was doing surprisingly well.
The Bank of Canada’s overnight rate
This is the reference interest rate for variable-rate mortgages, lines of credit and floating-rate loans. Without a trade war, the economy has been stable enough to suggest the Bank of Canada will in the near term either leave rates untouched or make just one last cut on top of the six we’ve seen since spring 2024. The central bank’s rate-cutting in 2025 will be a clear sign of how much trouble it sees in the economy. March 12 is the next opportunity for the bank to adjust rates, and a cut is expected.
Nerves are already jangling at the prospect of a trade war causing a stock market decline. A drop in housing prices would be worse, given the importance Canadian puts on home equity as an indicator of wealth and financial well-being. The most widely used gauge for the housing market is the monthly report on national average resale prices from the Canadian Real Estate Association. The numbers in the coming months will be a must-read, given how preliminary reports from Vancouver and Toronto in February suggest a big-time slowdown in sales.
What questions do you have about tariffs?
The tariffs announced by U.S. President Donald Trump have upended decades of free trade in North America, causing chaos on both sides of the border.
Alongside the chaos come many questions about how this will affect Canadians’ lives, and Globe reporters are here to help you navigate those. Perhaps you’re curious about how this might impact the sector you work in, or maybe you’d like to know what this means for your mortgage. Tell us what you want to know about these new levies, and we’ll do our best to answer. Please submit your questions below or send an email to audience@globeandmail.com with “Tariff Question” in the subject line.
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