The Week in Review

Weekly Market Recap: U.S. and Canada

Happy Thanksgiving!

Another great week in the markets, fueled by optimism around the upcoming earnings season, with analysts expecting companies to beat forecasts even in light of the current macroeconomic challenges. Investors also seem to be reacting to signs from the Federal Reserve that more rate cuts could be on the way, which would support growth by lowering borrowing costs. On the tech front, events like AMD’s AI showcase and Tesla’s robotaxi announcement added excitement to the Nasdaq's performance.

As for returns, the TSX led the pack with a 1.33% gain. The Dow & S&P 500 both reached new all-time highs, with the Dow up 1.21% and the S&P finishing with an 1.11% gain. The Nasdaq rose 1.18%. A bumpy start gave way to a strong mid-week rally, closing the week on a high note for both U.S. and Canadian markets.

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

TSX Returns | Week At-a-Glance

Major Economic Stories This Week

This week’s economic news focused on Canada’s unemployment numbers (which came in better than expected) the U.S. inflation reports, which provided mixed results.

Here’s how it all played out.

US Inflation Rate Eases to 2.4%

The US annual inflation rate slowed for the sixth month in a row to 2.4% in September, marking the lowest rate since February 2021.

The slowdown is nice, but inflation still came in above expectations of 2.3%. Lower shelter costs and falling energy prices helped drive the decrease, while food and transportation costs saw an uptick. Monthly core inflation remained steady at 0.3%, above the expected 0.2%.

• Annual inflation rate slowed to 2.4% from 2.5% in August.

• Energy costs dropped by 6.8%, driven by gasoline (-15.3%) and fuel oil (-22.4%).

• Food and transportation costs increased, with food inflation rising to 2.3% and transportation to 8.5%.

US Core Inflation Edges Up to 3.3%

The core inflation rate in the US, which excludes volatile items like food and energy, ticked up to 3.3% in September from 3.2% in the previous two months.

Expectations were for the rate to remain stable, but that didn’t happen. With costs for services, particularly shelter and transportation, showing significant gains. The monthly core CPI stayed at 0.3%.

• Core inflation rose to 3.3% from 3.2%, beating market expectations.

• Services less energy services costs increased by 4.7%.

• Shelter costs rose 4.9%, continuing to push overall inflation higher.

• Monthly core inflation rate remained at 0.3%, above the forecast of 0.2%.

Canada’s Unemployment Rate Falls to 6.5%

Canada's unemployment rate dropped to 6.5% in September, down from the previous month's 6.6% and below forecasts, which were calling for a rise to 6.7%.

This was the first decrease in the unemployment rate since January, aided by strong job gains of 46,700, which beat expectations. Personally, I thought it was very encouraging to see the youth unemployment rate also decline, contributing to the overall improvement.

• Unemployment rate fell to 6.5%, from 6.6% in August.

• A net 46,700 jobs were added, the highest in five months.

• Youth unemployment dropped by 1 percentage point to 13.5%.

• Participation rate dipped to 64.9%, marking a continued downward trend.

Key Takeaways From this Week’s Economic News

Canada’s Unemployment Rate Drops

The drop to 6.5% feels like some much-needed good news. Adding 46,700 jobs shows the labor market is regaining some strength, which should ease fears about a slowing economy. That said, the decline in the participation rate shows that not everyone is coming back to work, and that tells me there’s still some weakness under the surface.

US Core Inflation Rises to 3.3%

The uptick to 3.3% makes me think inflation isn’t under control just yet. (I wish I was more confident, but I’m not there yet.) Services like rent and transport are still pushing prices up, and this could affect the Fed’s rate decisions. It’s like the overall inflation trend is improving, but core inflation is a reminder that we’re not in the clear.

US Inflation Slows to 2.4%

A 2.4% inflation rate is progress, but it missed forecasts, which makes me cautious. Energy prices are helping, but rising food and transportation costs show parts of the economy are still struggling. I think the Fed is going to have to walk a fine line here—they’ll welcome the slowdown but won’t rush to declare victory.

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

Comments of the Week

🍽️ Improve Service Quality

I value more the service and willing to pay more if I know I’ll get my money’s worth. - hjcabitac

Heinous weight times and cancellations are somethings that need attention together with better maintenance of the planes. - aelaan

💸 Lower Prices

If the service is going to continue to be garbage, then the prices should come down to reflect that. I wouldn't mind paying the same amount or more if the services drastically improved. - amandalw78

Our antiquated competition laws need to be changed. Canadians need more choice and the Competition Bureau along with Government are frustratingly protectionist.

It costs me more money to fly within my own nation than it does to, and/or within Europe or the United States. This hurts the industry as it limits who can afford to fly. Not to mention, I can drive to Saskatoon from Winnipeg faster than WestJet can get me there. Having to fly to Calgary first then on to Saskatoon takes approximately 10 hours with a layover in YYC. I can drive there in 8. It’s absurd. - jaci63

BANKING
TD Bank Faces U.S. Sanctions, Cultural Failures, and Investor Distrust 

• TD fined US$3.09 billion over systemic AML failures.

• U.S. regulators impose asset cap, halting retail growth. 

• Internal emails reveal shocking compliance culture issues.

• New CEO Raymond Chun tasked with restoring trust and profitability. 

As a fellow TD Bank shareholder, watching its downfall over the past months feels like watching a slow-motion train wreck. After pleading guilty to conspiracy to commit money laundering, TD is now on the hook for US$3.09 billion in penalties—a truly jaw-dropping sum. The bank can handle that, but the real blow is the indefinite cap placed on its U.S. retail business, freezing assets at US$434 billion and shutting down any chance of growing its footprint south of the border. For a bank that prided itself on being “America’s Most Convenient Bank,” this is a major setback.

A Culture Problem Hidden in Plain Sight 

What really makes this scandal hit home is the way TD employees talked about laundering money, casually adding “LOL” to emails about suspicious activity. I mean really, that’s shameful and embarrassing. U.S. Attorney General Merrick Garland’s press conference revealed that staff openly joked about being “an easy target” for criminals. This isn’t just a failure of systems—it’s a cultural breakdown. 

CEO Bharat Masrani and his team are promising reforms, but is it too little, too late?

But it’ll take more than banning “LOL” to fix the deep-rooted issues here. Rebuilding trust with U.S. regulators and investors could take years, with some analysts predicting the asset cap might last as long as five years.

Where Does TD Go from Here? 

The hard truth is that TD’s growth engine is broken. With U.S. retail expansion off the table, the bank will need to pivot to riskier areas like corporate lending, junk bonds, and wealth management. They still have their strong balance sheet and a stake in Charles Schwab to lean on, but these moves won’t be easy, and incoming CEO Raymond Chun—who’s about to step into Masrani’s shoes—has his work cut out for him. 

The bank’s reputation has taken a hit, and Canadian regulators aren’t escaping scrutiny either. OSFI and FinTRAC are being criticized for missing red flags, and now TD has to move parts of its compliance program to the U.S. Not only does that look bad for Canada, but it also raises the possibility of job losses. 

At this point, investors want straight answers, not recycled PR lines. But TD’s leadership has yet to explain why they were pushing to buy First Horizon Corp. even while these criminal investigations were ongoing. They also planned to open 150 new U.S. branches by 2027—plans that now seem highly unlikely. 

Chun will need to do more than just steady the ship—he’ll have to rebuild the bank’s reputation from the ground up. Right now, TD’s stock trades at a discount compared to its peers, and unless real accountability happens, it could stay that way for a long time.

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THE ECONOMY | EMPLOYMENT
Hiring Surge Sparks Bank of Canada Rate Cut Debate

• Canada added 47,000 jobs in September, outpacing forecasts.

• Unemployment rate dipped to 6.5% from 6.6%.

• Central bank's next rate cut decision remains uncertain.

• Inflation and wage expectations are cooling, easing pressure on the Bank.

September’s job numbers were strong — Canada added 47,000 new jobs, far more than the 27,000 analysts expected. On top of that, the unemployment rate dropped from 6.6% to 6.5%, even though people thought it would rise. Full-time roles surged by 112,000, though part-time jobs shrank by 65,000. Most of these gains came from the private sector in industries like retail, recreation, and professional services. But not everything’s rosy — total hours worked fell 0.4%, which has people wondering if the job market is still a bit wobbly.

What This Means for Interest Rates

This report threw a wrench into predictions for the Bank of Canada’s next move on October 23. Just a few days ago, many were betting on a big 0.50% rate cut. But now, things aren’t so clear. Two reports from the Bank of Canada — released the same day as the jobs data — show that businesses are still cautious and consumers aren’t exactly optimistic. Companies aren’t rushing to expand, and people are spending less, even with inflation expected to stay between 2-3%. While it’s good news that inflation seems under control, high rates are clearly still squeezing the economy.

All Eyes on the Inflation Report

With these mixed signals, the Bank of Canada’s rate decision feels like a coin toss.

Many analysts now expect the Bank to stick with a smaller 0.25% cut, but they’re waiting on the September inflation numbers coming out Tuesday to finalize their bets. If inflation comes in below 2%, as expected (thanks to falling gas prices), it could tip the scales. Either way, October 23 is shaping up to be a close call.

TRANSPORTATION
Boeing to Cut 10% of Workforce Amid Ongoing Struggles

• Boeing will reduce 10% of its workforce over the coming months. 

• The company faces mounting financial losses, strikes, and safety concerns. 

• A historic strike by 33,000 workers has worsened Boeing’s financial position. 

• Boeing will delay new programs and discontinue the 767 freighter by 2027. 

Boeing CEO Kelly Ortberg informed employees on Friday that the company will lay off 10% of its workforce, amounting to roughly 17,000 potential job losses. He cited Boeing’s ongoing difficulties, including “structural changes” needed for future recovery, as reasons for the cuts.

Boeing had already implemented rolling furloughs during a strike by 33,000 workers, which will now end with these layoffs.

Ortberg added that teams will learn more about their roles next week.

Financial Losses and Strikes Worsen Outlook 

Boeing's troubles began with the 737 Max crashes in 2018 and 2019, leading to a global grounding and scrutiny from regulators. COVID-19 further hurt the company, reducing demand for planes and pushing Boeing into billions of dollars in debt. Recent setbacks include a missing door bolt on a 737 Max, prompting a federal investigation, and costly delays to the Starliner spacecraft. Strikes have only added to the losses, costing Boeing around $1 billion a month and, as of today, labor negotiations have yet to resolve issues. 

Programs Cut and Future Delays 

Boeing announced it will discontinue production of the 767 freighter by 2027 and further delay the 777X, with the first delivery now expected in 2026. While Boeing offered workers a 30% raise in negotiations, union members are still dissatisfied, largely over the loss of pensions. In an interesting twist of fate, reports are that although Boeing’s financial position remains dire, its competitor Airbus cannot fully absorb Boeing’s orders, and that will keep Boeing in the game.

IT, TRANSPORTATION, BROKEN PROMISES
Tesla's Robotaxi Event: Flashy, But I’m Still Skeptical

• Musk says Cybercabs will hit the streets by 2026.

• Investors, like me, wanted more than just hype.

• Tesla’s stock dropped 11% after the event.

• The self-driving tech has some big hurdles to clear.

Before I start, full disclosure. I’m not a huge Elon Musk fan.

But I sucked it up and put on my big-boy pants this week and watched segments of Tesla's big Hollywood event this week and, of course, Musk was in full showman mode. There was the sleek "Cybercab," a 20-person robovan, and even some humanoid robots shaking it on the dance floor and mixing drinks. (Is it just me, or was that creepy?)

As usual, Musk threw out big ideas, like turning parking lots into parks and getting the Model 3 and Y to drive themselves in California and Texas next year. It all sounds awesome on paper, but I kept wondering, "Okay, but how are we actually going to get there?"

Investors Aren’t Completely Sold—And Neither Am I

Tesla bulls were hoping for more than just shiny new toys. A Tesla shareholder hit the nail on the head when he said it’s time for action, not just promises.

I agree. Tesla still needs to keep selling electric cars in the next couple of years, not just promise sci-fi-level robotaxis, which Musk has been promising since 2019. And what happened to that $25,000 affordable car he’s been talking about for ages?

Self-Driving Sounds Awesome, But There’s a Catch

Tesla is trying to outdo Waymo with a simpler, cheaper approach to self-driving, but Tesla's tech is still playing catch-up. Musk’s plan to have these things driving on their own by next year? Let’s just say I’m not holding my breath.

At the end of the day, it felt like classic Musk—big promises, tons of hype, but not a whole lot of answers.

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OTHER NEWS FROM THE PAST WEEK

Jamie Dimon Warns of Growing Geopolitical Threats
JPMorgan Chase CEO Jamie Dimon cautioned that escalating geopolitical crises, including conflicts in Ukraine and the Middle East, could harm the global economy. Despite these risks, the bank beat earnings expectations last quarter.

Spotify plans to raise prices in Canada
Spotify will raise subscription fees in Canada, with individual plans jumping to $12.69 and family plans increasing by $4 to $20.99 per month. The company cites economic factors and service improvements for the change.

IRS Rushes Aid to Hurricane-Hit Small Businesses
The IRS says it’s expediting $10 billion in pandemic aid to small businesses affected by Hurricanes Helene and Milton. Business owners hope Employee Retention Credit refunds will help them recover from the storms' devastation.

Robot Vacuums Hacked to Yell Racial Slurs
Not finance related, but I thought this was hilarious, so I added it here. Hackers exploited a security flaw in Ecovacs Deebot X2 vacuums, using them to shout racial slurs and harass owners. The company plans to release a security patch in November to address the breach.

Market Movers

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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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