- 5/16/2025
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00:00The Canadian Securities Exchange presents your go-to source for trends in junior and small-cap markets.
00:05Each month, join host Anna Saren and financial expert Bruce Campbell in partnership with Stockhouse.
00:13Welcome to Episode 4 of The Market This Month. You're joining us in May of 2025.
00:19In the 2025 Canadian federal election held on April 28th, Mark Carney's Liberal Party secured a fourth consecutive term,
00:27forming a minority government with 169 seats, just three seats short of a majority.
00:35The Conservatives, led by Pierre Polyev, won 145 seats.
00:40Carney, a former central banker, also won his seat in Nepean, Ottawa.
00:45The Liberals' victory was attributed in part to public concern over U.S. President Donald Trump's aggressive trade policies and annexation rhetoric,
00:54which contrasted with Carney's emphasis on Canadian sovereignty and economic stability.
01:01Following the election, Carney met with President Trump in a tense Oval Office meeting,
01:06where he firmly rejected Trump's suggestion of Canada becoming the 51st U.S. state,
01:13stating,
01:13Canada is not for sale.
01:16The meeting highlighted ongoing tensions over trade and national sovereignty,
01:21with both leaders acknowledging the importance of continued dialogue, despite their differences.
01:27Carney faces pressure to renegotiate a trade deal that supports jobs,
01:32especially in auto and resources, two sectors hit hard by U.S. tariffs.
01:36Meanwhile, his energy platform emphasizes clean energy expansion,
01:42streamlined project approvals, and reduced reliance on the U.S.,
01:46though analysts caution that meaningful impact could take years to materialize.
01:51Turning to our markets, we now try to assess,
01:55is this a bull market, bear market, or something in between?
01:58After the pullback from February highs to April lows, we're seeing signs of consolidation.
02:05But there's a technical signal flashing that has market watchers buzzing.
02:09The breadth thrust indicator.
02:12We'll also dig into the safe haven debate, gold versus Bitcoin.
02:16Both assets are hovering near record highs,
02:19but which is better equipped for inflation, recession, or geopolitical tensions?
02:23Gold remains the traditional go-to while Bitcoin continues to push boundaries
02:28with institutional interest and digital native adoption.
02:33As uncertainty looms, choosing your hedge wisely matters more than ever.
02:38As we navigate this evolving landscape, post-election shifts,
02:42global policy pressures, and volatile sentiment across sectors.
02:47One thing is clear.
02:49Understanding market signals, sector exposure, and long-term trends
02:53is more important than ever.
02:56Hi, my name's Anna Seren.
02:57I'm Director of Listings Development with the Canadian Securities Exchange.
03:00You're joining us here for Episode 4 of The Market This Month.
03:04I'm joined by none other than Bruce Campbell with Stonecastle Investment Management.
03:08Thank you for joining me, Bruce.
03:09It's awesome to be back.
03:11It is great to have you back here in Vancouver.
03:13And we've had a fantastic spring so far, and weather anyways.
03:17Yeah, for sure we have.
03:18Yes, absolutely.
03:20Okay, we have lots that we're going to unpack today.
03:23We are speaking in May of 2025.
03:25This is Episode 4 of The Market This Month.
03:28And we are in a post-election world.
03:32Not post-apocalyptic, but post-election.
03:35So let's talk about, you know, we obviously in the intro,
03:38we talked about what happened, the election results.
03:41Hopefully all Canadian citizens know the election results.
03:44But, you know, do you have any commentary there on how now with the Liberal Party being in power again,
03:52any thoughts on how this could impact the market?
03:55Yeah, I mean, I guess the concern or part of the concern was what would happen and how that might impact investment markets.
04:05And we really didn't see much impact at all, right?
04:08So the Canadian dollar was still fairly stable.
04:11Canadian markets were still fairly stable.
04:13Canadian bond rates were still fairly stable.
04:14So from that perspective, it really just kind of came and went.
04:19And it didn't really have a large impact on investing immediately.
04:23Right.
04:23Now, you know, this is where things are going to change going forward.
04:27You know, what happens with the productivity?
04:28What happens with, you know, some of the unlocking of resources?
04:31And, you know, how will this all transpire over the next few years?
04:35Right.
04:36Now, maybe another way of looking at it is that the rubber needs to hit the road now.
04:42So there's been a dialogue.
04:44I feel like we've been in this election mode for much longer than we were actually in it
04:52because we knew that Trudeau was going to be stepping down.
04:56We knew that Carney was going to be stepping in.
04:59And then we knew this election would happen.
05:01So we've been in this mode for a while.
05:03Do you think maybe the markets didn't react as much as we thought that they might
05:08because there's a little bit of investor exhaustion that reacting to it might be
05:13more than they're able to do anymore?
05:16I mean, it could be exhaustion, not from the election and what's happened,
05:20but just overall market exhaustion, right?
05:22There's been so much dynamic around the news flow and how that impacts markets.
05:29But the other thing that could have played into this is that, you know,
05:33while there's lots of polls and they flip back and forth,
05:38you know, from when Trudeau originally stepped down and the Conservatives had a big lead
05:43to, you know, coming up to Election Day,
05:46it became apparent that they had lost that lead and that the Liberals were there.
05:49So it wasn't a surprise.
05:50I think markets, you know, usually can price in an outcome,
05:56but when they're surprised, that's where you tend to see that moves.
05:59Right.
06:00Gotcha.
06:01That makes sense.
06:02Well, you know, some of the things that he has talked about implementing,
06:07I think will take a little bit of time for us to see how that's going to play out
06:11as far as some things that might come down and hit the market.
06:15So we'll pay attention to that.
06:18Okay.
06:19Are we in a bull market or a bear market, Bruce?
06:24Yeah.
06:24We're unfortunately right in kind of the no man's land right now.
06:28So, you know, there's lots of traditional kind of metrics that,
06:33you know, are simple and people like to use.
06:35So the 200 day moving average,
06:37if the market's above the 200 day moving average or below the 200 day moving average.
06:41Right.
06:41In Canada, we are above that.
06:43I mean, by no means does that define a bull market or a bear market.
06:47Yeah.
06:47But that certainly is positive or at least not negative.
06:52In the U.S., we dropped way down and we came up to that level.
06:55We've just been sort of like gravitating towards that for the last few weeks.
06:59But what we have seen that, you know,
07:02makes investors a little bit concerned and nervous is what the leadership is.
07:08And so we saw this leadership of, you know, technology prior to the market starting to correct.
07:16And now we've seen that rotate.
07:18So it's consumer staples, utilities, financials is a good sign.
07:22That's been positive.
07:24But typically when we see those staples and utilities leaving,
07:30that's usually, you know, investors are concerned.
07:32So we almost have a bit of a barbell and so we're kind of in this no man chop land.
07:38Are we in market purgatory or?
07:40Perhaps.
07:40We've come through earnings and, you know, we've come through the majority of earnings.
07:44And by the time this is broadcast, we'll be finished with earnings.
07:47And they have been, for the most part, fairly good.
07:50I mean, obviously the one concern is tariffs and what impact those will have.
07:54And we still won't know that for a while.
07:56So it's hard to actually say whether or not we are in a new bull market and we just saw this correction happen
08:03or if we're, you know, going to consolidate and go sideways and only time is going to tell us that.
08:07Right, right.
08:08So we're not exactly sure where we're at.
08:11Hopefully it's a bull market.
08:12That's my hope for all of us.
08:14Okay, let's talk about, this is a technical signal that you pay attention to.
08:22The market, sorry, the breadth thrust indicator, right?
08:27Okay, I'm going to talk, I'm just going to give a little background on what this is.
08:32But the breadth thrust indicator is rarely triggered technical measure of market momentum.
08:38It was developed by a fund manager, Martin Zweig.
08:41The breadth thrust occurs when the 10-day moving average of advancing stocks versus total stocks
08:46on an exchange moves from below 40% to above 61.5 within 10 trading days.
08:54It's considered an extremely bullish sign and for good reason.
08:58Since its inception of the S&P 500 in 1957, this signal has only occurred 16 times
09:05and has been 100% accurate every time it's identified the start of a new bull market.
09:12So what are we seeing with this indicator?
09:14Well, we've seen it trigger.
09:16So it met the criteria that we needed for it to happen.
09:21And now, you know, and this happens, there's been a few of these that I've experienced over my career.
09:26And the same thing happens every time.
09:29You know, people always throw a little bit of cold water on, well, why, you know,
09:34why it's not going to work this time or why this time it's different.
09:38We know that those are, you know, sort of the most dangerous words in investing this time.
09:42It's different.
09:43But what we know is that it has actually triggered.
09:47There was some interesting stats that I've done because, you know, Marty Zweg went back
09:52and only looked at it, as you mentioned, from like 1957.
09:56There's been some other people who have calculated and taken it all the way back to the 1900s.
10:00And they actually found that it doesn't work 100% of the time.
10:03Okay.
10:04And when it doesn't is because we're heading into a recession or a depression.
10:08And so that was in the, you know, 29 through, you know, sort of 40 period.
10:12Okay.
10:12And that's the only thing that we don't know is if whether or not that's where we're headed.
10:17Most people say that's not the case.
10:19You know, we might have a recession, but we're not going to have a depression.
10:22Okay.
10:22And so what we're looking at right now is that, okay, we've got this, we've got this positive
10:27signal.
10:28It's indicated, you know, with 100% accuracy.
10:31Doesn't necessarily mean it has to happen.
10:33But when we combine it with other things, it's good to know kind of in the back of our minds
10:37that, okay, we've had this signal.
10:39If things continue to improve, then we probably are on the launch pad for something really
10:43strong.
10:44Okay.
10:45Well, it seems like there's a few indicators out there right now that are telling us that
10:48there is a possibility that we could see a bit of a market, right?
10:52Yeah.
10:52I mean, the market's V-bottomed so far.
10:56It hasn't retested that.
10:57It's regained, you know, 50% of its drop from high to low.
11:03It's regained that.
11:04It's not quite at that 200-day moving average.
11:06What we want to see, though, is we want to see investors' appetite for stocks move more
11:13towards, you know, the higher growth, growthier type of companies as opposed to the defense
11:19of Staples Utilities type of names.
11:22And we can actually see a barbell.
11:24We've seen that before.
11:25So, you know, 2019 was an example of that where technology-led and utilities-led, which was
11:30an interesting year.
11:32Maybe we see that again, but we need that leadership.
11:34So far, it looks like financials are starting to come.
11:37It'd be nice to see if we saw something else, maybe industrials or, you know, mining or even
11:43technology.
11:44Okay.
11:45And on that note, I mean, the one elephant in the room that we haven't brought up in
11:50episode four is tariffs.
11:52Yeah.
11:52Do you feel, I mean, it feels to me like it's starting to settle down a bit, the yo-yo back
11:59and forth.
12:00I mean, look, tariffs are still going to be a part of our life for the foreseeable future.
12:04It seems like that is what's happening.
12:07But the back and forth seems to be slowing down.
12:10Is that helping things settle a little?
12:13Yeah.
12:14So if you, you know, like you say, the back and forth, if you take those, you know, those
12:17little marbles that are on the strings and they hit each other and they go back and
12:19forth.
12:20Well, the energy is now starting to wear that.
12:23It's just like, it's like smaller, you know, it comes to a stop.
12:27I don't think that now that, you know, they've proposed tariffs, that tariffs are gone.
12:32I don't think they're out of the, you know, going to go back to no tariffs, but they will
12:36probably get scaled back.
12:38That's right.
12:39Significantly.
12:39And as a result, the market's been able to recognize that and starting to be able to
12:44price that in.
12:45The surprises are really what caused the big movement up and down.
12:49And it seems like that's started to fade.
12:54Okay.
12:55Okay.
12:55Well, I mean, that's good for now.
12:58And I guess we'll find out in the coming quarters how that's affecting, you know, the bottom
13:05line for the companies that we're investing in, right?
13:08Well, the one big thing that, you know, has had a fairly negative impact is consumer sentiment.
13:15Okay.
13:15And that's just because of kind of the uneasiness of, well, what's happening with those tariffs.
13:22But interestingly enough, there's been lots of studies done on consumer sentiment.
13:26And when consumer sentiment's high, markets don't tend to do well over the next sort of
13:3112 or 24 months.
13:33Right.
13:33And when consumer sentiment is low, they do tend to do fairly well because it's all washed
13:39out.
13:39Right.
13:40And of course, every time is unique, but human emotion tends to be fairly similar.
13:47So we've just seen a very low reading for consumer sentiment.
13:51So it'll be interesting what happens going forward.
13:53And it's just one more piece to kind of add to all the others when we kind of look at all
13:59of the feedback and all of the data together.
14:01Well, I think too, I mean, when you talk about investor sentiment, even for me personally,
14:05when the markets are good, I don't examine my portfolio as closely as when they're bad.
14:12Yeah.
14:12So maybe just the human nature component is that when there is a lot of the pendulum swinging
14:18or uncertainty in the markets, we might as investors pay more attention.
14:23Yeah.
14:24Maybe we become more active investors and maybe that leads to better markets.
14:29Perhaps.
14:29Yeah.
14:30Okay.
14:31Let's talk about gold and the US dollar.
14:35Obviously, the two are having a moment.
14:38Tell us what's happening.
14:39Yeah.
14:40So, you know, we've talked a lot about gold and gold's, you know, bumping up against new
14:45highs right now.
14:47But one of the things that's quite interesting is where you see correlations go.
14:52So where one instrument moves compared to the other one.
14:56And right now, the US dollar and gold have been moving in almost perfect opposite direction.
15:02So if the US dollar goes up, gold goes down.
15:05And if the US dollar goes down, gold goes up.
15:09Right.
15:09That has historically been-
15:13A relationship.
15:13That's a really steady relationship.
15:15But right now, especially in the last kind of 90 days, it's really tight.
15:20So it's, you know, about a 0.9, negative 0.95 correlation.
15:24So one moves, the other one moves.
15:26Right.
15:26And we didn't really see that as much when gold was moving up throughout the last, you
15:32know, kind of 18 months.
15:33Yeah.
15:34We saw that.
15:34And there was periods of the US dollar moving up and gold moving up at the same time.
15:40Maybe not like on a daily basis, but if you looked at it over kind of like a weekly and
15:44monthly basis.
15:45Right.
15:45So something to watch because the dollar and gold are really moving together or opposite
15:50of one another.
15:50Right.
15:51Right.
15:52Interesting.
15:53So I guess my next question to that is how has Bitcoin got a relationship to this all?
16:00Yeah.
16:00So, I mean, lots of people, you know, kind of refer to Bitcoin as like the new gold or,
16:05you know, a different store of value.
16:07Yeah.
16:07I don't think it's quite the same.
16:09I think a gold as a currency and you clearly see it's acting like a currency.
16:14Right.
16:15With the US dollar the way it's been.
16:17But Bitcoin is also hitting, you know, new highs, which is, again, when you look at the
16:23weight of evidence where we talk about breadth thrusts, we talk about, you know, bull market,
16:28bear market.
16:28And now you're seeing a risk investment that's Bitcoin hitting and getting closer to, you
16:35know, its all time highs.
16:37You really have to sort of pay attention to that.
16:39Yeah, absolutely.
16:40And I think Bitcoin, too.
16:42I mean, Bitcoin has been around long enough now that you've got to imagine that it is going
16:47to start naturally getting treated as a fiat.
16:51Right.
16:51I mean, it's, there's a generation that might only know that as being a currency that we
16:57use in society.
16:58And do you think that they'll continue to add value and weight to it?
17:04Potentially it does.
17:05I mean, the one thing that we have seen is that it's becoming more institutionalized.
17:09Right.
17:09Right in that, you know, 10 years ago, if a portfolio manager decided they wanted to own
17:15Bitcoin for their portfolio, it was extremely difficult and they had to go out and get a
17:20wallet.
17:21And then even then, the custody of that Bitcoin was kind of in question because their regular
17:27custodians wouldn't hold it.
17:29Well, now there's multiple ETFs of multiple cryptocurrencies and you can just go out and buy it.
17:36And if five minutes later you decide you want to sell it, you can turn around and sell it.
17:41And so that's one thing that has really changed and that will continue to, I think, move in
17:47a direction where institutions include Bitcoin or other cryptocurrencies in their portfolio
17:54going forward.
17:55Flow of capital doesn't like resistance.
17:57It likes to be able to find it there easily.
18:00Okay.
18:00Let's talk about, on a sector level, there's obviously some industries that have been, that
18:09were leading the way, that are no longer leading the way, new sectors coming in.
18:12Tell us what you're seeing there.
18:14Yeah.
18:14So anytime we go through that correction, typically the sector that led you in doesn't lead you
18:21out.
18:22Right.
18:22And that's what we're seeing, right?
18:23I mean, technology has been really the strong leader for probably 18 months.
18:28Yeah.
18:28But, you know, there was a lot of talk around AI.
18:32There was a lot of interest around AI.
18:33I don't think that's gone away.
18:35But now valuations are starting to come into perspective.
18:39Which makes sense.
18:40Yeah.
18:40We've seen this kind of growth value shift to a certain degree.
18:44And now we're starting to see some of those other sectors that are leading.
18:48So, you know, financials were up there, but, you know, now they're really starting to accelerate.
18:54So that's a good sign.
18:54We haven't really seen anything from, you know, I shouldn't say anything, but, you know,
18:59energy hasn't really been doing a lot.
19:02Granted, the price of oil hasn't been that high.
19:05But that would be a sector that we probably want to watch to see what happens with it.
19:10Because, historically, as the economy globally is accelerating, you start to see energy, you know, doing better just because more demand and less or kind of limited supply starts to push it up.
19:24I mean, we are seeing a lot of economies around the world that were accelerating prior to the tariffs.
19:30Whether or not they continue to, that's, I think, what the market's really kind of nervous about.
19:35Yeah.
19:35Yeah.
19:36Okay.
19:36Well, we'll watch that for sure.
19:38Okay.
19:39We're going to get into my favorite part of the show, Bruce.
19:42We're going to talk about CSE listed issuer news.
19:45We have some neat stuff that happened in the past month.
19:49So, we have a newly listed company that's just joined us in early May, McFarlane Lake Mining Limited.
19:58They actually, they came over to the CSE from Cibo Canada.
20:02The company is advancing a portfolio of gold exploration projects, including past producing Macmillan and Mongowin properties near Sudbury,
20:10West Hawk Lake and High Lake near Ontario-Manitoba border.
20:14And the Michaud-Monroe property along the Golden Highway east of Timmins.
20:20CEO Mark Trevisiel, I hope I said that right, Mark, said the move to the CSE with home to over 350 mining companies or mining and exploration issuers aligns with their growth and strategy and increases investor visibility.
20:37So, we're very excited to have them.
20:39We love seeing these local Canadian projects and definitely they have a great team behind them.
20:48So, welcome, McFarland.
20:50Thank you for joining the CSE and the family.
20:54Beyond Oil, I wanted to mention, I thought this was interesting, Bruce.
20:59So, they've been with us for a little while.
21:00They're a food tech innovator focused on reducing health risks from fried foods and improving sustainability in commercial kitchens.
21:07They recently exercised $4.5 million in warrants.
21:12So, they actually joined us two years ago at the inaugural summit on responsible investment and spoke on stage.
21:19They've been with us a few years.
21:20It's quite neat to see what they're doing.
21:22What I thought was kind of neat in these markets was to see an issuer exercise warrants and not only exercise warrants, but that amount of capital.
21:31What are your thoughts on that?
21:32Yeah, I mean, that stock has been doing really well.
21:35The company's been executing.
21:36They just keep getting more deals.
21:38And so, they have these warrants that are really in the money.
21:42And so, clients or investors have decided that they're going to exercise those.
21:47And it's great because it's cash back to the company.
21:50Exactly.
21:50At the same time, it's a return for the investors as well.
21:54I mean, look, this is the whole point of what warrants are supposed to be, okay?
22:00So, you know, sweeteners and warrants and such things, they're meant to, you know, provide some value of investing directly in the company and taking some additional risk, maybe if it's earlier stage.
22:11And the goal is that the warrants end up in the money.
22:13The thing that is so wonderful is when you see warrants exercise is that the money goes back into the company.
22:22So, there's a resurgence back in.
22:23It's not just trading on the secondary market.
22:25But I also love that it makes your existing shareholders bigger shareholders in the company and coming back in, you know, at a second round, essentially.
22:34So, good for them.
22:36They've obviously done a really great job to have that much support in the markets.
22:40I also wanted to mention Dragonfly.
22:43They're a drone technology firm.
22:45They just raised $3.6 million U.S. under their NASDAQ listing.
22:51And so I thought, first of all, this was interesting because we're starting to see more and more drone companies coming to the market, which I thought was interesting.
23:00It really, that technology really is starting to get implemented, I think, in many different ways.
23:05We have some other companies coming to us that have some neat drone technology.
23:11But also, I wanted to ask you, they are raising money in the U.S.
23:14And I was curious with what's been going on in our political framework that we live in now.
23:20And I know that some of our issuers wonder, how do U.S. investors feel about investing in Canadian securities right now?
23:29So, what are your thoughts on that?
23:30It's definitely a vote of confidence, right?
23:32I mean, the fact that these U.S. investors stepped in and invested, and they also did in U.S. dollars, which is great to see as well.
23:40Yeah, absolutely.
23:41Well, congratulations to Dragonfly.
23:44And then finally, just wanted to mention King Global Ventures.
23:47They closed an oversubscribed private placement of $5.51 million.
23:54The proceeds will fund ongoing exploration and drilling at their Black Canyon project in Arizona, which includes 213 contiguous concessions and 15 former operating mines within that asset, including past producing Howard Copper Mine.
24:12The company is focused on precious and base metals exploration across North America.
24:17It's just, we continue to see, month by month, these nice little exploration capital raises.
24:24So, you know, I know the markets have been tough in kind of the junior and growth side.
24:30But we are seeing these nice little chunks getting raised.
24:33What are your thoughts on that?
24:35Is this specialized money?
24:37Is this, you know, where is this coming from?
24:39Well, the taps haven't been fully turned on.
24:42Okay.
24:42But like in a case like this, where they have old past mines that became uneconomic at some point in time because of what it costs to mine and the metal prices.
24:53Right.
24:53And now you've seen the metal prices rising so that it becomes economic again.
24:57Turn those lights back on.
24:58Yeah.
24:58This is kind of the story of, you know, the last couple of years.
25:02Not so much the pure exploration, like we're going to dig a hole and try to find something.
25:06It's like, hey, we know there's something there.
25:08Right.
25:08And we just want to like restart it and then get it producing cash flow.
25:12But it's going to take us a little bit of money to get there.
25:14And then we have the cash.
25:15Right.
25:15Right.
25:16That's amazing.
25:17Well, congratulations to all of those CSC issuers on doing so well.
25:22Okay, Bruce, before we can talk again in a month from now, what should we be thinking about in the markets?
25:29Well, lots to watch, right?
25:31Okay.
25:31I mean, we've talked a little bit about, you know, the bigger picture markets as far as, you know, are we in a bull or a bear?
25:38And, you know, hopefully we get some sort of clarity on what that direction is.
25:42And with that, part and parcel comes what sectors are going to be leading and, you know, where the opportunities lie, you know, for the next 6, 12, 24 months.
25:53Okay.
25:54All right.
25:55Well, I look forward to chatting with you again in a month.
25:58Thank you all for joining us as Episode 4 of The Market This Month.
26:03We will be back in June for Episode 5.
26:08We have the Summit on Responsible Investment coming up.
26:10We will be in your hometown of Kelowna.
26:13For anyone locally, please come and join us.
26:15All of the information can be found on our website.
26:18We will be releasing content all summer long, highlighting our issuers that are in the space.
26:24So stay tuned.
26:25If you go to our YouTube page, feel free to hit subscribe and we'll let you know when new content comes to our CSC TV.
26:35Thank you again for joining us, Bruce, and look forward to chatting next month.
26:38Yeah, exactly.
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