Mexican and Canadian stock markets are outperforming the U.S. this year.
The SPDR S&P 500 ETF Trust (ticker: SPY) is down 2% so far this year as of Tuesday, March 24. The iShares MSCI Canada ETF (EWC) has risen 3.4% and the The iShares MSCI Mexico ETF (EWW) has soared 11.8%.
Investors may be forgiven for wondering why. After all, President Donald Trump has imposed steep tariff increases (with the potential for more on the way) and the fallout is expected to damage the economies of Canada and Mexico as well as that of the U.S.
So why isn’t more of this risk showing up in markets now? One simple reason on full display this week is investor optimism the tariffs won’t actually go into effect or last long if they do. But there are more complex factors at work in Canada and Mexico that will dictate future returns. These dynamics are important…
