The Week in Review

Weekly Market Recap: U.S. and Canada

Things started pretty choppy on Monday but then settled in and moved higher midweek, finally cooling on Friday. It looks like we are seeomg a classic rotation into value and dividends.

As for the numbers, the TSX finished up +0.59% for the week, the laggard when compared with the U.S. indices. The Dow Jones led the pack with a gain of +1.74%, the S&P 500 added +0.89% and the Nasdaq 100 gained +0.41%.

Major Economic Stories

Recap of the Week

This week was all about U.S. inflation. U.S. core price pressures moved up and added a few twists to the Fed’s upcoming rate decision. At home, Canadian housing showed pockets of strength.

Here’s how the week played out.

U.S. Core Inflation Climbs

Core CPI rose to its highest level in five months, coming in a 3.1%.

Shelter, healthcare, and insurance all contributed to stronger core gains. The month-over-month increase was sharper than June, and investors now expect more Fed caution.

• Shelter remains the largest contributor to inflation

• Medical costs and insurance add persistent pressure

• Household goods inflation creeping higher

• Market forecasts underestimated July’s jump

• Watch My Full Breakdown on YouTube

U.S. Headline Inflation Holds Steady
Price pressures were mixed but overall stable in July, at 2.7%

Used cars and transportation costs pushed higher, while energy dragged the index down. Shelter inflation eased slightly, providing a small relief.
As noted above, though, core inflation ticked higher, showing underlying pressures remain.

• Gasoline and fuel oil prices continued to fall

• Food inflation stayed flat but remains sticky

• Natural gas costs remain elevated

• Energy disinflation offset higher vehicle prices

Producer Prices Surge Beyond Expectations

The U.S. PPI shocked with its biggest jump since 2022.

Service costs led the rise, especially in wholesaling margins. Goods prices also jumped, thanks to volatile food categories and Core PPI accelerated well above estimates.

• Fresh produce costs surged nearly 40%

• Wholesale margins show supply chain tightness

• Diesel and jet fuel prices back on the rise

• Core PPI signals broader inflationary pressures

Retail Sales Still Showing Strength

U.S. consumers kept on spending despite inflation pressures.

Auto and furniture sales led the way, alongside strong online spending, but some discretionary categories still fell, including electronics and building supplies. GDP-linked retail control group rose in line with expectations.

• Auto sales recovery boosted July’s totals

• Furniture demand suggests housing resilience

• Online spending remains a structural growth driver

• Sales gains support Q3 growth outlook

Key Takeaways

PPI Shock Raises Pass-Through Risk

I think the July PPI pop is the week’s biggest swing factor. July’s producer price report came in much hotter than expected, with both services and goods costs jumping. That matters because wholesale prices often trickle down into what consumers pay later on. It doesn’t mean we’re heading into another inflation wave, but it does push back on the idea that inflation pressures are behind us.

For companies, this could mean a squeeze: they either absorb the higher costs or push them onto customers. Normally, that might make the Fed cautious, but with a September cut nearly certain, I think they’ll look through this. What I’ll be watching is whether companies talk about price increases on Q3 calls, and whether services inflation (outside of housing) picks back up. If it does, the Fed may move more slowly after September, but the first cut is basically locked in.

Core CPI’s Re-Acceleration Complicates Cuts

Core inflation, which leaves out food and energy, ticked up to 3.1% in July, now the highest in five months. That’s not an out-of-control number, but it does muddy the waters. Housing costs are still the biggest driver, and while new rental data shows relief may be coming, it hasn’t fully shown up in the official numbers yet.

As I said in my recent YouTube video, I think the Fed’s hands are tied here. Even with sticky inflation, the odds of a September cut are basically locked in. (92.1% as of this morning, down from 99.9% a few days ago). It looks like policymakers are looking past the noise in the data, knowing the economy is cooling under the surface. If shelter costs start easing later this fall, that only strengthens the case for more cuts.

Consumers Still Spending, But Selectively

Retail sales showed U.S. shoppers are still spending, especially on cars, furniture, and online purchases. Discounts are working, e-commerce continues to gain share, and that strength should help keep the economy afloat in the short run, even though labor market signals are turning softer.

But when we take a closer look, we see that spending isn’t even across the board. Electronics and home-improvement sales are struggling, while housing-related categories and travel look stronger. To me, this shows resilience, but also limits. Lower gas prices are freeing up some extra spending room, but if producer costs keep rising and trickle into consumer goods, the Fed will face a tougher trade-off. Still, I think rate cuts are coming regardless, as policymakers will prioritize growth support over chasing every last inflation uptick.

THIS WEEK’S POLL QUESTION
(Results in Next Week’s Newsletter)

Air Canada’s strike has grounded hundreds of flights and stranded thousands of passengers. At the heart of the fight are wages, unpaid work hours, and how fairly flight attendants are compensated. Management says its offer would make attendants the best paid in Canada, while the union argues many still earn less than minimum wage once unpaid duties are factored in. Who do you feel has the best argument?

LAST WEEK’S POLL RESULTS

Last week, I asked if you’d support tax incentives for companies that hire full-time workers. The vote was close, with 43% saying Yes and 57% saying No. Clearly the community is divided, some liking the idea of nudging firms toward stable jobs, while others are skeptical that tax breaks really fix the problem.

As always, please vote on this week’s poll question and leave your comments.

Reader Comments

No

"Any tax on corporations will be paid by consumers(tax payers). Corporations will simply up the cost to recover most or all of it.” — bonofied12

“The govt needs to stop immigration right now” — steevengingras1970

Yes

“But we need to prioritize local people first” — maddiett305

“There is rarely bad ideas just very poor implementation, usually by governments. Should that turn us away from a good idea. No, there are just as many good ideas that have been successful, as there have been good ideas that without oversight & poor government management that have ended in the bin. Canadians have seen their fair share of very poor governments. I believe that tax incentives to business to hire, if properly managed could be a big success.” — entender1012"

LABOUR
Air Canada Strike Grounds Flights Nationwide

• 10,000 flight attendants on strike after contract talks collapsed

• More than 600 flights already cancelled, affecting over 100,000 travelers

• Pay structure and unpaid ground work central to dispute

• Air Canada pushing for arbitration, union resisting government intervention

Air Canada flight attendants went on strike Saturday, and the airline was forced to suspend nearly all of its operations. The walkout immediately led to hundreds of cancellations, leaving more than 100,000 passengers (around the globe) scrambling to change travel plans. The dispute comes down to wages and unpaid ground time, with the attendants arguing they often work hours off the clock before and after flights.

Pay and Work Rules at the Core

Negotiations stalled earlier in the week, with Air Canada declaring an impasse and the union issuing a strike notice. The airline says its latest offer, up to a 16% pay increase in year one, would make attendants the best paid in Canada. The union counters and says that rookie attendants would still be making less than minimum wage when you factor in those unpaid hours.

What Happens Next?

Air Canada wants Ottawa to step in and impose binding arbitration, but the union strongly opposes outside intervention. The government has urged both sides to keep talking. For travelers, the pain is immediate, and over 130,000 people will be affected in the coming days. For Air Canada, the longer the strike lasts, the bigger the hit to its reputation and finances.

Read More Here

HOUSING
Canadian Home Sales Rise for Fourth Month

• National sales up 3.8% in July, led by Ontario rebound

• GTA transactions surged 35% since March, CREA says

• Prices steady at $672,784, just 0.6% above last year

• New listings expected to flood market in September

Canadian home sales were up again in July, the fourth straight month. According to the Canadian Real Estate Association (CREA), transactions were up 3.8% from June, with Ontario, and particularly the Greater Toronto Area, leading the way. Nationally, prices held steady, which says the overall market is stabilizing but not overheating.

Sales Momentum Picking Up

CREA noted that while activity is still below historical averages, four consecutive monthly gains is a shift. Toronto’s rebound has been sharp since March, even though affordability concerns haven’t gone away. Ontario sales rose 7.7% month-over-month, offsetting weakness in other provinces. CREAT economist Shaun Cathcart suggested the long-expected recovery may “finally have arrived,” although he notes that supply remains a critical factor.

Looking Ahead to Fall Listings

So, what can we expecting going forward? Market watchers are expecting a flood of new listings in early September, a time-honoured seasonal pattern that could test buyer appetite. Inventory levels have crept up 10% from a year earlier, so buyers now have slightly more choice. CREA Chair Valérie Paquin said demand seems to be reawakening, but affordability remains the swing factor. For now, the steady price trend signals balance, but the fall market will reveal if demand can keep pace with supply.

Read More Here

BLOSSOM SOCIAL
2025 BLOSSOM INVESTOR TOUR

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Whether you're a seasoned DIY investor or just starting out, the Blossom Investor Tour is your chance to plug into the investing community that's changing the game, and meet the people behind the portfolios.

What to Expect

🎤 Live panel talks featuring some of your favourite creators and finance pros. Stay tuned as we announce the full lineup!

🤝 Connect IRL with hundreds of fellow DIY investors, creators, and brand partners

🍸 Food, drinks, and light bites served throughout the night, all included with your ticket

🛍️ Blossom t-shirt, tote bag, lanyard, and other exclusive Investor Tour swag drops!

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More Information Here

REGULATORY ISSUES
CIRO Proposes More Flexibility for DIY Investors

• CIRO proposes guidance to let DIY platforms give more support

• Narrower “recommendation” definition may allow sample portfolios and tools

• U.K. proposals go further, including product suggestions and risk warnings

• Advisors may face more competition from low-cost online support

I found this next story very interesting, given my history as a former industry professional, and now, a social media (YouTube) creator. Canada’s investment regulator wants to make life easier for do-it-yourself investors and the Canadian Investment Regulatory Organization (CIRO) is proposing new guidance that would let online platforms provide more support, such as tools tools and model portfolios,without crossing into “advice.”

Canada vs. the U.K.
Right now, Canadian platforms can’t make recommendations because DIY investors don’t go through suitability checks, but CIRO’s proposal would loosen that by narrowing what counts as a “recommendation.” Meanwhile, the U.K. is looking at going further, letting platforms flag risky investments and even suggest cheaper alternatives.

Impact on Advisors
For investors, this could mean better, lower-cost guidance when building portfolios. For financial advisors, it raises the bar, as they’ll need to focus on areas where humans add value, like tax and estate planning. In short, online platforms may get smarter, but full-service advice still has a role for more complex needs.

Read the full story here.

THE ECONOMY
BBC Report: U.S. Economy at a Crossroads

• U.S. economy slowing but not collapsing—mixed signals across data

• Labor market showing weakness while consumer spending holds up

• Inflation sticky as tariffs raise costs of imports

• Fed stuck in wait-and-see mode as risks of stagflation rise

To most of us here in North America the U.S. economy remains a puzzle, and I read an easy to digest article from the BBC this week that gives us a European take on what’s happening on this side of the pond. The facts are the same no matter where you live; the U.S. economy is showing a confusing mix of signals. Job growth has slowed sharply, and some economists warning of a rising risk of recession. At the same time, consumers are still spending, and retail sales beat expectations in July, and that’s keeping the economy afloat for now.

Slow Growth, Sticky Prices

President Trump’s tariffs and immigration policies have fueled worries of “stagflation,” where weak growth meets stubborn inflation. As I noted above, producer prices have now jumped at the fastest pace in three years, so it looks like more price pressures may be on the way. Even so, consumer spending has stayed stronger than many expected, and that has given the economy some cushion.

What to Watch Next

The Fed is stuck in wait-and-see mode, balancing the risk of a downturn against sticky inflation. Prices for basics like coffee and bananas are already rising, with more hikes possible (probably?) as tariffs kick in. For now, markets are betting the economy can push through, but the next few months will tell the tale on whether consumers can keep carrying the load.

Read the full Story Here

OTHER NEWS FROM THE PAST WEEK

Gas Prices Slide Into Summer Relief
Lower oil prices are giving Canadians summer fuel savings, though storm risks could reverse quickly.

Text Scams Are Exploding
Smishing scams are rising—fraudsters mimic banks or couriers with fake texts to steal personal data.

Buffett Bets on Steel and Housing
Berkshire revealed new stakes in steel and homebuilders, signaling confidence in U.S. housing demand.

Don’t Play Hero With This Market
Analysts warn investors to stay defensive—focus on balance sheets and cash flows, not bold bets.

Wholesale Prices Surge Again
U.S. wholesale prices jumped in July, raising concerns about inflation pass-through to consumers.

Market Movers

Top 10 Weekly Gainers

Top 10 Weekly Losers

10 Most Overbought Stocks

10 Most Oversold Stocks

The Relative Strength Indicator (RSI) can provide a signal that suggest a stock is either overbought or oversold.
📈A stock that has an RSI over 70 is considered to be in “overbought” territory. This might suggest that the stock is due for a pullback, however it is not a recommendation to sell.
📉A stock that is trading with an RSI below 30 is considered to be in “oversold” territory. This might suggest that the stock is due for a recovery, however it is not a recommendation to buy. Always perform your own due diligence.

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