The Week in Review

Weekly Market Recap: U.S. and Canada

The markets were under pressure this week as we saw rising bond yields and persistent inflation concerns keeping investors cautious. Economic data showed a surprisingly resilient U.S. economy, which raises the prospects (albeit still slim) that the Federal Reserve may be less incentivized to aggressively cut rates. The Nasdaq gained slightly from strong sector earnings, but higher borrowing costs weighed on large-cap stocks, with the Dow Jones struggling notably as traditional industries felt the impact.

In terms of returns, it was a mixed week. The Nasdaq 100 managed to eke out a modest 0.14% gain, supported by tech resilience. However, the S&P 500 dropped by 0.96%, while the TSX declined 1.37%. The Dow Jones had the sharpest decline, falling by 2.68%, as cyclical sectors faced more pressure. It was, to be sure, a challenging week.

S&P 500 Returns | Week At-a-Glance

TSX Returns | Week At-a-Glance

Major Economic Stories This Week

The big story this week was the Bank of Canada’s interest rate decision, with Tiff Macklem announcing a bold 50 basis point cut. The discussion now turns to whether the bank has overshot things a bit, and if it risks putting the prospect of renewed inflation back into the headlines. On that note, please don’t forget to vote in today’s poll question.

This weeks’ stories:

Bank of Canada Opts for Larger Cut

The Bank of Canada lowered its policy interest rate by 50 basis points to 3.75% in October, bucking the prospect of limiting the cut to 25bps.

This cut follows a significant drop in inflation to 1.6%, below the target of 2% for the first time in three years, amid softening consumer demand and a cooling labor market. The BoC signaled that additional rate cuts may occur if economic conditions align with their outlook. The bank's latest report projects that inflation will stabilize near target, with GDP growth expected at 1.2% for 2024 and a stronger 2.1% in 2025.

• Key interest rate: Cut by 50bps to 3.75%

• Inflation rate: Dropped to 1.6% in September

• Unemployment rate: Rose above 6.5%, highest in over two years

• GDP growth forecast: 1.2% in 2024, 2.1% in 2025

US Durable Goods Orders Fall 0.8%

Orders for durable goods in the United States declined by 0.8% in September, amounting to a $2.2 billion decrease, slightly better than the expected 1% drop.

This decline is mainly attributed to transportation equipment orders, which fell 3.1%. Machinery, computers, and capital goods also experienced declines. However, excluding transportation, new orders increased by 0.4%, while non-defense capital goods orders (excluding aircraft) rose by 0.5%, indicating stronger-than-expected business investment plans.

• Durable goods orders: Decreased by 0.8% to $284.8 billion

• Transportation equipment orders: Down by 3.1%

• Non-defense capital goods orders: Rose by 0.5%

• Excluding transportation: New orders increased by 0.4%

Key Takeaways From this Week’s Economic News

Bank of Canada’s Rate Cut Signals Shift to a More Accommodative Policy 

The Bank of Canada’s decision to lower its key rate by 50bps confirms a decisive pivot towards supporting growth as inflation has dropped below target. This move suggests the central bank is concerned with a lagging economy and cooling labor market, signaling that more rate cuts are on the table if economic softness persists. For households, lower borrowing costs could ease debt burdens, but slower growth may dampen income gains and employment stability.

For more insight, watch my full breakdown in this week’s Pulse News YouTube Video

US Durable Goods Orders Reflect Mixed Economic Signals 

September’s decline in durable goods orders in the U.S., especially in transportation equipment, points to weaker demand in key manufacturing sectors, but there’s a twist: rising orders in core business investments like non-defense capital goods (excluding aircraft). This indicates that while consumer-facing sectors might be slowing, businesses are still investing strategically, signaling some optimism in long-term growth. This divide could hint at sector-specific slowdowns rather than a broader economic slump, though it will be important to monitor if demand softening continues to impact business sentiment in the coming months.

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

Comments of the Week

👎 No, It’s Not Fair

While it seems like a lot of money to foot over for the tobacco industry, they still sell tobacco and make new addicts each day.

I just lost a family member due to long cancer which she battled for over 10 years. The pain and suffering of her battle will never be told, and leaves us to wonder what would have happened if she never smoked. I quit smoking 45 years ago and still to this day I like the smell of a fresh light cigarette. What price can we put on a human life and what about all the lives it will keep taking? - aelaan

Tobacco causes cancer resulting in death, need I say any more. Oh yes should cancer be caused by secondhand smoke I'm a non-smoker I've known a couple of other non-smokers that have died due to smoking related cancers. - wouldbine

👍 Yes, It’s Fair (Sort of)

As long as there are future settlements I think this is fair! - tomkieselbach446

BANKING
TD Bank Hit by Moody’s Downgrade 

• Moody’s downgraded TD Bank due to governance issues.

• U.S. regulators imposed limits on TD’s U.S. growth.

• Canada’s government is calling for accountability.

• TD aims to boost risk management and stay stable.

I promise you I’m not going to highlight a TD Bank story every week in this newsletter, but it’s still making news in the fallout of its U.S. scandal, so I don’t think I really have a choice but to at least keep you up to date.

In the latest twist, Moody’s has downgraded TD Bank’s rating, after the bank pleaded guilty to money laundering charges. The credit rating agency isn’t convinced by TD’s management’s assurances, and it has cut the rating to a2 and saying the failures call TD’s governance into question.

This downgrade means investors may now view TD as a riskier bet, potentially leading to pricier borrowing for the bank.

What Does This Mean for TD and Its Future?

Credit ratings like Moody’s don’t just sit on paper—they impact what banks pay to borrow. While the downgrade didn’t knock TD into “junk status,” it does add pressure on its U.S. business. Moody’s did cut the bank a bit of slack, noting TD’s strong Canadian performance, which might give it some breathing room as it works to improve. TD’s next year, according to Moody’s VP Robert Colangelo, will be “transitional,” with the bank focusing on fixing its anti-money laundering issues and rebalancing its U.S. operations.

Canada’s Response and More Regulatory Pressure

Canadian officials, including Prime Minister Trudeau, are pressing TD for answers. The U.S. Department of Justice reported that TD’s leadership failed to oversee its anti-money laundering practices effectively, leaving TD exposed for years. In response, Prime Minster Trudeau weighed in his his comment.

S&P Global recently echoed similar concerns, saying TD needs a stronger “risk-management culture.”

Clearly, while TD has steps underway to fix its issues, rebuilding trust with regulators will not be an easy task.

Read the Full Story here

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Disclaimer
Commissions, management fees and expenses all may be associated with investing in Harvest Exchange Traded Funds (managed by Harvest Portfolios Group Inc.). Please read the relevant prospectus before investing. The indicated rates of return are the historical annual compounded total returns (except for figures of one year or less, which are simple total returns) including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. The funds are not guaranteed, their values change frequently, and past performance may not be repeated. The content of this article including the views expressed is to inform and educate and therefore should not be taken as investment, tax, or financial advice.

* The current yield represents an annualized amount that is comprised of 12 unchanged monthly distributions as a percentage of the closing market price of the Fund. It does not represent historical returns or the performance of the ETF.

IMMIGRATION
Canada Cuts Immigration Targets Amid Public Concerns

• Ottawa plans significant cuts to permanent resident targets.

• Temporary resident caps will also be introduced for the first time.

• Critics argue the cuts may affect labor and economic growth.

• Public concern over housing and affordability issues is growing.

Canada is about to see a major shift in immigration policy, with Prime Minister Justin Trudeau set to announce reduced permanent resident targets. This new three-year plan cuts the target from 485,000 in 2024 to 395,000 in 2025, and will drop further to 365,000 by 2027. The decision reflects growing public unease over rising immigration levels and their impact on housing and living costs, which recent polls indicate has risen by 14% in just the past year.

Now for the first time, Ottawa will also establish a cap on temporary residents, like international students and those on work permits. Immigration, Refugees and Citizenship Canada (IRCC) aims to lower temporary resident numbers from 7.3% to 5% of the total population over three years.

Mixed Reactions from Policy Leaders and Advocates

As we could easily anticipate, this policy reversal has sparked pushback from migrant advocacy groups and economic leaders. Syed Hussan from the Migrants Rights Network expressed concern that any reduction might be a problem.

Hussan also cautioned that cuts to refugee admissions could jeopardize Canada’s humanitarian commitments under the Geneva Convention.

Meanwhile, Lisa Lalande, CEO of Century Initiative, worries these changes may hinder growth in critical sectors, especially with Canada’s aging population and low birth rate. Calling the cuts “a categorical mistake,” Lalande emphasized the need for a steady influx of permanent residents to support the economy and labor needs in healthcare, construction, and beyond.

Economic Concerns and Temporary to Permanent Pathways

The Canadian Chamber of Commerce also sounded alarms about the impact on labor supply, and has urged the government to maintain 60% of immigration in the economic class, given the strong demand for skilled labor.

Read the Full Story here.

TELECOMMUNICATIONS
Rogers’ $7B Equity Deal to Cut Debt and Boost Control

• Rogers raises $7 billion through equity, keeping network control.

• Deal helps pay down debt faster with minor cost increase.

• Expected to improve Rogers’ leverage ratio from 4.2 to 3.7.

• Competitive pressures on wireless and roaming costs are rising.

In an effort to manage its high debt levels, Rogers Communications is bringing in $7 billion from a new “structured equity” deal. Unlike typical share sales, this setup gives a minority investor a stake in a portion of Rogers’ wireless backhaul network—the infrastructure carrying data between towers and central systems—without giving up any actual shares or control. Instead, the investor will receive a cut of revenue from wholesale data usage, which Rogers anticipates will grow as demand rises.

According to CFO Glenn Brandt, Rogers expects to save around $300 million annually in interest payments by immediately paying down debt. Although payouts to the investor will be slightly higher than that interest cost, Brandt called the deal a solid opportunity.

Debt Reduction After Shaw Acquisition

Rogers has a goal of reducing its debt after acquiring Shaw Communications for $20 billion, and this equity deal will speed up that timeline by a full year. Currently, Rogers carries about $43 billion in debt, but this move should lower its leverage ratio to 3.7 by year-end—closer to its target of reducing long-term debt loads and keeping credit ratings stable.

Meanwhile, Rogers reported net earnings of $526 million this quarter, a solid improvement from last year’s $99 million loss, thanks in part to strong subscriber growth and sports-driven media revenues.

Wireless Market Competition and Regulatory Pressure

Like all Canadian telecom companies, Rogers faces a competitive wireless market, which has seen users choosing lower-cost plans during the back-to-school season. With average revenue per user slightly down, CEO Tony Staffieri acknowledged the pressures in a changing market. And regulators are increasing scrutiny on telecoms, with the CRTC recently demanding telecom providers, including Rogers, create action plans to lower roaming costs.

Read the Full Story Here

HOUSING
Landlords Now Suing Tenants Over Public Protests

• Tenants facing libel suits from landlords for protests.

• Legal battles highlight tension in Canada’s housing crisis.

• Tenants and advocacy groups push back, citing free expression.

• Rising rents and housing conditions fuel tenant activism.

I found this next story to be extremely interesting.

Canada is seeing a growing trend where tenants facing issues like poor building conditions, frequent eviction notices, and alleged harassment are increasingly turning to protests and public messaging to demand landlord accountability.

But the script has flipped in an unexpected twist. Recently, four tenants at Toronto's Mello Court Apartments protested poor heating and harassment at their landlord’s business, and that has resulted in the landlord filing a $200,000 libel suit for alleged defamation and trespassing. For tenant Mohamed Nizam and others, the suit came as a shock, but they are undeterred: “We are not going to be silenced,” Nizam said, emphasizing their commitment to public advocacy.

Landlords’ New Strategy Against Tenant Activism

In Vancouver, a similar dispute arose with landlord Anoop Majithia and his company, Plan A Real Estate, which sued six tenants for defamation after protests and flyers accused him of “landlord scum” behavior and dishonesty. The tenants, frustrated with evictions and dismissive responses to their concerns, felt compelled to “publicly engage and rally,” according to protester Jonathan Petrov. Tenants’ attorney Danika So says that landlords are trying to oppress disgruntled tenants.

Escalating Tensions Amid Canada’s Housing Crisis

You don’t have to look very far to see the root causes of all this conflict. Rising housing costs and strict rental laws have intensified tenant activism. Long-term renters, fearful of rent hikes, resist landlords’ eviction efforts. This increase in activism, according to housing policy researcher Ricardo Tranjan, brings an “upward trend in tenant activism” with landlords “retaliating” in response.

Advocacy groups argue that defamation suits, criminal charges, and eviction threats are tactics to deter tenants from organizing, yet I’m sure we’ll see more of theses stories as the housing crisis continues.

In partnership with Harvest ETFs

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OTHER NEWS FROM THE PAST WEEK

Nvidia Briefly Becomes World’s Most Valuable Company
Nvidia’s stock rose this week, momentarily surpassing Apple as the most valuable company globally, driven by skyrocketing demand for its AI processors. The semiconductor giant’s market value touched $3.53 trillion before Apple reclaimed the lead.

Ontario Grocers Resist New Bottle Return Rules
Ontario grocers are pushing back on sudden bottle return requirements attached to the province’s alcohol sales expansion, citing logistical and hygiene challenges. Some stores plan to abandon their alcohol licenses, frustrated by the costly new regulations.

Ontario Family Loses $38K Deposit in Housing Scam
An Ontario family’s $38,000 deposit vanished after a fraudulent financing deal, crushing their dream of homeownership. The family urges buyers to verify agents’ credentials to avoid similar heartbreak.

Economist Urges BoC to Cut Rates Steadily
Economist David Rosenberg argues the Bank of Canada should enact consecutive 50-bps rate cuts to stimulate Canada’s economy, citing ongoing excess supply and sluggish growth per capita amid high immigration rates.

Delta Airlines Sues CrowdStrike for $500M
Delta Airlines is suing cybersecurity firm CrowdStrike for $500 million, claiming inadequate software testing led to major disruptions, including 7,000 canceled flights. CrowdStrike disputes the claims, citing Delta’s outdated IT systems.

World Series Ticket Prices Hit Record Highs
Tickets for the Yankees-Dodgers World Series are the most expensive ever, with prices reaching nearly $1,800. The iconic matchup between these two major market teams has pushed demand to new heights.

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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