In this edition we’ll identify the stocks benefiting most from the recent trend of low volatility outperformance and why the Americans are paying a mad king tax that depresses economic growth. The diversion hints at mass laziness in the work force and as always there’s a look ahead to important data releases. Open this photo in gallery: TMX broadcast centre in TorontoFred Lum/The Globe and Mail Equities The low-vol winners CIBC technical analyst Sid Mokhtari identified the high degree of relative strength for low volatility ETFs and then looked under the hood of these funds to uncover individual stocks that have been driving outperformance. The defensive nature of low volatility ETFs – they emphasize consistent and predictable profit growth rather than the fastest growing companies – has them outperforming in CIBC’s matrix model measuring technical strength, profitability, market sensitivity (beta), momentum and performance. Mr. Mokhtari believes low volatility portfolios will continue to outperform because major technical indicators, even the vaunted “Death Cross” (the 50-day moving average crossed through the 200-day on the way lower at the start of this week), imply further weakness for the S&P 500. A successful re-test of the April 8 low in the S&P 500 might change the analyst’s mood (it would suggest a durable floor for the index) but until then, defensive stocks should beat the market. With this in mind, Mr. Mokhtari analyzed the top holdings of low volatility ETFs to find opportunities – the individual stocks that are most responsible for the strong returns from low volatility ETFs. The methodology focuses on companies that have been able to outperform the broader low volatility ETFs. There are 31 stocks, the top 10 of which are Fairfax Financial Holdings Ltd., Agnico Eagle mines Ltd., Wheaton Precious Metals Corp., Intact Financial Corp., Loblaw Companies Ltd., George Weston Ltd., Dollarama Inc., RB Global Inc., TC Energy Corp. and Metro Inc. Tariffs fallout America’s mad king tax Economists may never be able to quantify the effects of on-again, off-again tariffs on actual profits but Goldman Sachs’ Jan Hatzius attempted to assess the fallout from the subsequent uncertainty on U.S. growth. There is a real sense that the confusion resulting from inconsistent policy proclamations amounts to a mad king tax on U.S. corporations. Mr. Hatzius believes that investment growth will be cut by five percentage points as CEOs battle policy uncertainty. This could push year over year corporate investment into negative territory and, since one company’s investment is another’s’ revenue, this has a negative effect on corporate profits. Similarly, questions regarding tariffs and government spending levels will depress job growth. Mr. Hatzius forecasts a monthly decline of 20,000 net jobs within the next year, as the projected cut of 25,000 to 30,000 federal jobs hits the U.S. data reports. The economist expects that 35,000 jobs will be lost in private sectors that rely on government spending. The weakening jobs market will directly and indirectly detract from consumer spending. The unemployed don’t spend much - that is the direct part. Also, a sliding equity market crimps spending due to wealth effects and may also increase the savings rate for those concerned about being fired. Open this photo in gallery: Matthias Tunger Diversions Only a tiny minority works hard Fortune Magazine recently cited a study concluding that 79 per cent of U.S. employees are disengaged while working and author Jared Dillian discussed the ramifications in a late March substack post called Nobody Works. The U.S. is an extremely wealthy society despite the broadly lackadaisical workforce. Mr. Dilliard concludes that “all economic progress is made by a tiny minority of people who work very, very hard.” The column grants that there are professions, like teachers and doctors, where most people do work hard despite inadequate incentives. In many large companies though, “nobody works”. The Essentials Looking for our updates on market movers, analyst actions, stock technicals, insider trades and other daily, weekly and monthly insight? Click here to visit our Inside the Market page. Globe Investor highlights The Magnificent Seven mega caps have lost their most crowded trade crown for the first time in 24 months. Gold has taken its place Billionaire investor Ken Fisher says even though Trump’s ‘Liberation Day’ tariffs were foolish, they’re no reason to slash your equity exposure Why Europe is less panicked about the stock market Desjardins’ chief economist updates his views on markets and the Canadian economy What’s up next The Bank of Canada left interest rates unchanged on Wednesday; the economic release calendar is light for the upcoming week. For S&P/TSX 60 earnings, Metro Inc. reported results in line Wednesday morning. Next Wednesday will see Rogers Communications Inc. (C$1.008 per share expected), Waste Connections Inc. (US$1.087) and First Quantum Minerals Ltd. (-US$0.072). The schedule for U.S. economic reports is much lighter than usual. Industrial Production was released Wednesday at -0.3 per cent vs -0.2 per cent month over month expected. The S&P Global U.S. Manufacturing PMI is out next Wednesday. U.S. earnings season continues. Las Vegas Sands Corp. ($0.564 per share expected), Blackstone Inc. ($1.06) and Netflix Inc. ($5.683) all report on Thursday. Next Tuesday will see Northrop Grumman Corp. ($6.289), Tesla Inc. ($0.447) and Quest Diagnostics Inc. ($2.172) all post results. See our full economic and earnings calendar here (You can bookmark the page - it gets updated weekly)