The Richter Economic Timeline: What was known or knowable and what did the market say?

The Richter Economic Timeline

Sources: Available upon request

Richter’s economic timeline plots local and world events together with a depiction of the volatility of the stock market (S&P 500) and credit markets (the spread of publicly traded BBB corporate bonds over U.S. treasury notes).

After losing $6.6 trillion in Q1 2025 due to fears of a global trade war, U.S. stocks rebounded strongly in Q2 reaching new record highs at the tail end of June 2025. Despite overwhelming uncertainties driving market volatility at the start of the year, significant tariff reprieves and potential trade deals have provided relief and permitted global markets to face these challenges with greater resiliency.

Equity markets and bond yields are likely to experience continued volatility in the second half of 2025 as they continue react to shifting macroeconomic signals. This occurs contemporaneously with the following:

• The Bank of Canada and U.S. Federal Reserve held steady in Q2 largely due to the uncertainties and risks posed by the impact of tariffs. Further rate reductions to support economic growth amid these uncertainties is expected.
• Canada’s unemployment rate peaked at 7% in May, the highest it’s been since 2021. The U.S. unemployment rate held steady around 4.2% during Q2, although amid ongoing trade tensions, it is expected to increase to 4.3% in the second half of 2025.
• Canada’s housing market has remained slow amid economic uncertainty and trade tensions, with affordability remaining a key challenge—particularly for first-time buyers.
• Mark Carney was elected Prime Minister of Canada in April, forming a Liberal minority government. Since coming into office, the Prime Minister has sought negotiations and met with President Trump, although a trade deal framework is yet to be reached resulting in the continued announcement of tariffs and counter-tariffs from both countries, keeping tensions ongoing.
• Canada and its NATO allies agreed to invest five percent of their respective gross domestic product over the next ten years in defence spending, whereas in the past the target of two percent was minimally enforced. Prime Minister Carney has said that Canada will take a slower, more measured approach to defense spending.
• Among the innovative tech stocks (MATANA*), Microsoft (+16.7%) and Nvidia (+14.2%) have rebounded significantly after the stocks collectively lost trillions of market value in Q1. Among other tech leaders, Meta (+22.8%) enjoyed a significant increase in market value.
• While tensions in the middle east remained high amidst the ongoing Israel-Hamas War in Q1, the previously brokered Israel-Iran ceasefire collapsed and escalated into a 12-day war. On June 23, a ceasefire was agreed upon by all parties and contributed to the continued strength of U.S. equities at the end of Q2.
• Contemporaneously, there are continued concerns and uncertainties over the sustained military invasion of Ukraine by Russia.
• The U.S. and China agreed to a 90-day tariff reprieve in May, as the two countries strive to agree on an outline for a trade deal. The temporary relief of tariffs and the possibility of a trade deal were essential to the resiliency of global markets amid global uncertainties.
• The U.S. and Yemen’s Houthis agreed to a ceasefire in May whereby attacks on U.S. vessels would come to an end. However, there continues to be disruptions in global maritime trade, significantly extending shipping times. In response, international players have recently become more directly involved in addressing threats to key shipping routes.

*MATANA describes the market’s technology leaders – Microsoft, Apple, Tesla, Alphabet, Nvidia and Amazon..

This timeline was compiled by Richter Inc.’s Business Valuation and Dispute. A similar version was published in the CBV Institute’s Journal Advisory Group.

Link: https://cbvinstitute.com/wp-content/uploads/2020/11/CBV-Institute_Journal2020_Final.pdf