The Week in Review

Weekly Market Recap: U.S. and Canada

It was another wild week in the markets and investors had to deal with a lot of volatility and a steady drip, drip, drip of macro uncertainty. Every rally faded almost as quickly as it formed, and by the end of the week the tone was probably a mixture of both tension and relief.

For returns, the TSX slipped 0.52% for the week. The S&P 500 fell 1.95%, while the Dow landed close by with a 1.91% drop. The Nasdaq 100 had the roughest week, down 3.07%, as investors rotated away from higher-growth names and trimmed exposure heading into year end.

Major Economic Stories

Recap of the Week

The word of the week was caution, as fresh inflation and labour data painted a mixed picture for both Canada and the United States. We were left trying to figure out whether the softening signals reflect progress or a warning sign for the months ahead.

Let’s take a deeper look.

Canada Inflation Edges Closer to Target

Headline inflation fell to 2.2 percent as energy costs continued to drag on the index.

Gasoline’s steep 9.4 percent annual decline drove much of the slowdown, helping transportation inflation ease sharply. Food inflation cooled to 3.4 percent as packaged goods saw slower increases, and shelter inflation ticked down to 2.5 percent. Wireless prices jumped 7.7 percent after major carriers raised fees, and that added friction to the services side. The trimmed-mean core rate slipped to 3 percent, keeping the Bank of Canada on track for its near-term baseline outlook.

• Cellular services posted first increase in over two years

• Car insurance prices climbed 7.3 percent in October

• Mortgage insurance costs accelerated 6.8 percent

• Food preparations rose 3.2 percent during the month

Canadian Core Inflation Edges Higher

A key underlying measure rose to 2.9% even as headline inflation moved lower.

The core index posted a firm 0.6% monthly gain, a strong signal of continued stickiness in several service components. Excluding volatile items continues to reveal a slower path back to target, even with easing energy and grocery pressures in the broader basket. October’s increase marked the strongest annual core reading since August 2023. The mix leaves policymakers monitoring whether service inflation cools heading into year end.

• Core readings have risen in back-to-back months

• October’s increase reversed progress seen earlier this summer

• Wireless fee hikes flowed directly into core categories

• Goods disinflation offset less of the service pressure

US Jobless Rate Climbs Before Key Fed Meeting

The unemployment rate climbed to 4.4 percent as the labour force expanded sharply.

Unemployment rose by 219,000 while employment still increased, reflecting a sizeable inflow of workers that pushed participation to 62.4 percent. The number of employed Americans reached 163.645 million, continuing a long upward trend even as slack widens. The U-6 rate edged down to 8.0 percent, so we’re seeing fewer workers stuck in involuntary part-time roles. With another data gap ahead due to the government shutdown, this will be the final unemployment figure before the December Fed meeting.

• Labour force rose to 171.248 million in September

• Number of unemployed reached 7.603 million

• Participation rate gained 0.1 percentage point

• Headline rate exceeded market expectations of 4.3 percent

US Hiring Rebounds With Modest Strength

Nonfarm payrolls rose 119,000, a solid rebound after August’s decline.

Hiring strengthened across health care, food services and social assistance, while transportation, warehousing and manufacturing continued to shed positions. Employment in couriers and messengers dropped 7,000 and warehousing declined 11,000, reflecting ongoing freight weakness. Government payrolls fell another 3,000, extending a nine-month slide. With the October report cancelled, this release takes on added significance for the December policy discussion.

• Food services added 37,000 workers in September

• Hospitals contributed 16,000 of health care’s total gain

• Manufacturing saw a further 6,000 jobs lost

• Federal payrolls have fallen 97,000 since January

Top Insights

Inflation Progress Looks Uneven

I think the most important theme this week is how Canada’s inflation data sent two different messages at once. Headline inflation is easing nicely, which gives households and policymakers some relief. At the same time though, core readings pushed higher and again showed that underlying price pressures are not cooling as smoothly as hoped.

This could mean the Bank of Canada stays cautious longer than markets expect. Even though headline numbers look encouraging, the stickier core trend suggests the last mile toward 2 percent may be slower and bumpier. We can watch shelter and services closely because they continue to shape the direction of policy more than energy swings.

Labour Market Signals Are Getting Harder To Read

The US unemployment rate moved higher at a sensitive moment. I think this shift matters because it lands right before a major Fed meeting and arrives without the usual follow-up data. Participation rose, so part of the uptick is healthy, but the overall trend still points to a job market that is losing a bit of traction.

For markets, this introduces uncertainty rather than clarity. What’s new, right? Investors now have to guess how the Fed interprets a softening print that is only partially confirmed by payroll strength. Here’s what I’m watching: whether job losses widen beyond transportation and manufacturing, which would signal a deeper shift in momentum.

Hiring Strength Offers a Counterweight to Weak Spots

The U.S. payroll gains helped stabilize the picture a bit, even though the numbers were modest. This matters because it keeps the labour narrative from slipping entirely into slowdown mode and suggests that key service industries still have demand. Health care and food services continue to carry most of the weight, which shows that consumers and public-facing businesses remain relatively resilient.

The challenge is that growth is uneven. Manufacturing softness and ongoing government job losses build pressure on regional economies and could weigh on wage trends over the next few months. For now, I’m watching whether these service-sector gains can hold up if broader economic momentum cools further.

TOP STORY
Canada Post Faces Deep Cuts

• Canada Post expects to eliminate tens of thousands of jobs over the next several years

• The corporation is projecting a loss exceeding one billion dollars for 2025

• Delivery standards are shifting toward slower ground-based service

• Unions warn of reduced access for rural and remote communities

Is it time to stop the bleeding? Canada Post is entering one of the most difficult transformations in its history as it sees financial losses intensify and mail volumes continue to erode. Management is leaning heavily on attrition and voluntary departures to shrink the workforce, but the scale of change signals a dramatic reshaping of the national postal system. Communities that rely on regular mail service, especially in rural and northern regions, are facing the possibility of longer wait times and fewer service options as the organization adopts a leaner model.

Financial Strain Forcing Structural Change
Executives have made it clear that the current business model cannot continue without significant cost reductions. Operational deficits and climbing debt have pushed the corporation to overhaul routes, cut labour expenses and lean harder on community mailboxes to reduce daily delivery obligations, but you have to wonder whether these changes will have any material effect.

Service Experience Likely to Shift
Customers will feel the transition through longer delivery windows and a greater reliance on ground transport instead of air. In the city where I live, the most obvious effect has been with on-line deliveries, specifically Amazon, where Canada Post has stopped providing service. Up to now, it handled a big chunk of Amazon’s packages.

It’s true that the noted changes will lower expenses, but the also risk altering public expectations of what the postal service should provide in an era of next-day digital commerce.

Learn more here.

As I cover in the top story this week, Canada Post is entering a pivotal moment as losses mount and its traditional business model becomes harder to sustain. Leaders are weighing how much of the future should remain fully public and how much might rely on private partnerships or structural reform. Please vote on this week’s question:

LAST WEEK’S POLL RESULTS

In last week’s poll, I asked what would matter more for Walmart in the years ahead. Consumer spending won overwhelmingly with 79 percent of the vote, while leadership drew 21 percent. Clearly our readers see demand trends as the company’s most decisive long-term driver. Thanks to everyone who voted.

Reader Comments

Consumer Spending

“Everything is just so expensive. The sad part is that corporations, like Walmart, keep in elevated prices means everyone will suffer. People will stop spending, which will lead to job cuts, which leads to less spending. It’s an endless cycle because of corporation greed.
What Walmart should be doing is paying employees a living wage and stop with all the part time nonsense." — michelleepereira

“I believe more people want a simpler life. It's too chaotic right now and everyone is overwhelmed by inflation, not being able to afford food and housing and in the US, low wages. I wouldn't mind seeing Walmart disappear as there hardly is value there anymore” — skarkez

“I chose 'Consumer Spending Trends', but it's really 60% CST / 40% Leadership IMO... Why?
Leadership is always of utmost importance as a CEO can make or break a company, but you can have a terrific CEO/Leader and if consumer spending trends are negative, the company will most likely still struggle... “ — callawayguy

“The impact a CEO and the Board of Directors is highly overrated, especially in companies where the business model is well defined. It does not take a heck of a lot of skill, knowledge, or insight to “Stay the course.” — philip.swan

TECHNOLOGY
Tech Giants Drive Massive Bond Wave

• Leading US tech firms have issued tens of billions in new debt

• Borrowing is financing data centers, chips and AI training capacity

• Investors are growing uneasy about the pace of new issuance

• Return on these AI investments remains uncertain

I believe a concerning trend is developing with the tech giants. America’s largest technology companies are tapping the bond market at an aggressive pace in order to fund AI infrastructure. Instead of relying solely on cash reserves, they are issuing a wave of large bond deals to support data center construction and exponentially growing computing demands. While balance sheets remain strong, the sheer amount of new supply is straining investor appetite and raising questions about whether future AI revenue will justify the scale of spending.

Bond Market Absorption Becomes a Question
Pretty much everyone would agree that, at this point at least, the new leverage is manageable but the market has to digest record levels of issuance arriving in a compressed window. Investors are signaling concerns that pricing power may shift away from issuers if demand cools.

AI Investment Returns Under Scrutiny
The spending boom assumes long-duration payoffs from enterprise adoption and cloud-based AI workloads. If growth slows, companies may find themselves carrying substantial debt on projects that take longer than expected to produce profits.

Learn more here.

Learn AI in 5 minutes a day

This is the easiest way for a busy person wanting to learn AI in as little time as possible:

1. Sign up for The Rundown AI newsletter

2. They send you 5-minute email updates on the latest AI news and how to use it

3. You learn how to become 2x more productive by leveraging AI

Sign up to start learning.

COMMUNICATIONS
Bell Announces Major Workforce Reductions

• Bell is cutting jobs as part of a broad restructuring plan

• Declining legacy revenues are accelerating the shift toward digital services

• Competition from streaming and wireless providers is squeezing margins

• Employees face redeployment or voluntary exit programs

Bell announced this week that it’s preparing another round of layoffs as it adapts to pressure on traditional media and telecommunications businesses. The company’s older revenue streams are shrinking rapidly while competition from streaming platforms and new wireless entrants continues to reshape the industry. As a result, management is prioritizing digital operations and cost reductions, which means fewer roles tied to legacy infrastructure and more focus on automation and cloud-based services.

Legacy Business Under Pressure
When’s the last time you used a land line? For me, it’s been years. Traditional phone, cable and media revenues have been sliding for years, and that has prompted deeper cost cuts. The transition is forcing Bell to reallocate resources toward faster-growing segments and sunset outdated operations.

Workforce Adjustments Intensify
From an HR perspective, employees are being offered redeployment where possible, but a lot of roles are tied to shrinking lines of business and there’s not a lot of choice in those segments. Investors will watch whether these cuts help Bell regain momentum in markets where customer behavior has fundamentally changed.

Learn more here.

THE FEDERAL RESERVE BOARD
Fed Faces Data Gap Ahead of Rate Decision

• The October unemployment rate will not be released

• The Federal Reserve loses a key input before its December meeting

• Mixed labour data leaves policymakers without a clear trend

• Markets are preparing for heightened volatility

The Federal Reserve will head into its next meeting without the October unemployment rate after the shutdown halted data collection. The absence of this report has created an unusual blind spot at a time when labour trends are already sending conflicting signals and confidence in the BLS reports is falling. Policymakers will now lean more heavily on secondary indicators, and this increases uncertainty around how they will interpret the underlying strength of the job market.

Policy Clarity Becomes Harder to Achieve
Central banks obviously prefer complete datasets when assessing labour slack, wage pressure and inflation risk. Without a full picture, guidance may become more cautious, raising the chance of market misinterpretation.

Investors Brace for a Choppy Stretch
This time around, the missing figure means that traders must rely on September numbers, private-sector surveys and other incomplete indicators. You can expect that to lead to wider price swings as expectations shift with each alternative data point.

Learn more here.

TECHNOLOGY
Google Racing to Expand AI Capacity

• Google must double AI serving capacity roughly every six months

• Demand from Gemini and cloud clients is outpacing internal forecasts

• Infrastructure build-out requires rapid hardware, data center and network scaling

• The growth curve is pushing operating costs sharply higher

Talk about a double-edged sword! Google is facing extraordinary strain on its AI infrastructure as demand for model serving accelerates faster than planned. Executives say capacity must double on a near-biannual cycle to support the rapid growth of AI-powered products and enterprise adoption. This creates enormous pressure on data centers, chip supply, energy availability and internal logistics, and it’s forcing the company to build at unprecedented speed.

Infrastructure Growth Reaches a Critical Point
The massive scale of expansion requires constant procurement of advanced hardware and new facilities. This pushes capital expenditures higher and is creating operational challenges around power, cooling and geographic diversification.

Long-Term Strategy Hinges on Sustained Demand
So what lies ahead? Future profitability will depend on the continued expansion of AI workloads. If demand holds, the heavy investment pays off. If usage plateaus, a growing concern in some communities, the company risks carrying oversized infrastructure relative to revenue.

Learn more here.

OTHER NEWS FROM THE PAST WEEK

FINTRAC fines B.C. real estate firms over compliance gaps
Two B.C. brokerages were penalized after regulators identified weak anti-money-laundering controls, incomplete reporting practices and missing oversight structures, raising concerns about industry preparedness for stricter national compliance and enforcement standards.

Amazon to refund customers after major settlement
Amazon agreed to refund billions after claims of misleading Prime enrollment practices, marking a major consumer-protection outcome that could shift how digital platforms manage subscriptions, disclosure standards and customer consent processes.

Lilly becomes first drugmaker worth one trillion dollars
Eli Lilly entered trillion-dollar territory as surging weight-loss drug demand boosted valuations, strengthening investor confidence and signaling a powerful market shift toward long-term reliance on new obesity and metabolic-health treatments.

Shutdown threatens air traffic controller training pipeline
The prolonged US government shutdown stalled FAA training programs, raising concerns about staffing shortages and intensifying pressure on an aviation system already struggling with delays, retirements and uneven operational capacity nationwide.

Canadians drift back to US imports while chasing value
Canadian shoppers are returning to US imports as price gaps widen, even though many still focus on value, revealing shifting spending patterns shaped by currency movements and persistently elevated grocery costs.

JPMorgan downgrades Telus over dividend concerns
JPMorgan downgraded Telus after warning its dividend growth may be unsustainable, citing rising debt, softer cash flow and intensifying competition that could pressure long-term shareholder returns and strategic flexibility.

UK court ruling raises questions about online speech
A recent UK decision sparked debate over digital accountability, prompting renewed discussion about how online platforms handle harmful content and where governments should balance expression rights with public safety objectives.

France scrutinizes Musk’s Grok over harmful outputs
French regulators intensified oversight of Musk’s Grok after it generated harmful Holocaust-related misinformation, heightening global concerns about AI safety controls and the responsibilities of fast-scaling model providers.

Ford recalls 200,000 Broncos over display failure
Ford recalled about 200,000 Bronco models after instrument panel glitches obscured dashboard warnings, raising safety risks and sending dealerships scrambling to manage repairs and reassure affected drivers.

Wealthy residents accelerate departures from New York City
High-income households are leaving New York at a faster pace following new tax measures, stirring concerns about revenue stability and the long-term competitiveness of the city’s economic landscape.

Mexico-US trade shifts reshape Canadian import patterns
Changing North American trade flows are redirecting more goods through Mexico, pushing Canadian businesses to reconsider sourcing strategies and adapt to evolving supply chains and cost structures.

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.

Visit our YouTube Channel
Sign up for Pulse (Free)
Our Website
Comments and Feedback