As of yesterday’s close, we’re off to the 4^th worst start to the year on record, with only the pandemic and great depression responsible for greater YTD declines.

Volatility has been high across asset classes, with 10-year yields moving decisively in both directions over the past two weeks.

Currency markets have been equally choppy over this time period, as traders digest which economies are most vulnerable to a more protectionist U.S. regime.

U.S. equity markets have been ugly across the board, though defensive sectors (utes, staples, etc.) have held up better on a relative basis…

… and the same holds true on a factor basis, with a relative underperformance in small cap and relative outperformance in large cap value signalling institutional capital is looking for liquidity.

Canadian equities have outperformed slightly YTD, but have sold off a similar magnitude to U.S. equities since April 2^nd.

We looked at ~70 of the most prominent companies in Canada, which on average, have lost nearly 3 turns on earnings in the latest drawdown.

Recent multiple compression is largely driven by Canadian tech names, which have been dealing with headwinds related to data center demand prior to the latest round of tariffs.

Some of the tech sell-off is valuation driven, though there’s likely some expectation for negative forecast revisions from the street.

A good example here is Celestica (CLS), which is off more than 50% from highs with no change to consensus. 50% on multiple compression alone? Unlikely.

We’ll find out soon enough, with Q1 earnings season in the U.S. kicking off this week, and Canada following shortly after.