The Week in Review

Weekly Market Recap: U.S. and Canada

If you feel a bit dizzy after this week’s market ride, I understand. At the end of all the ups and downs, things finished pretty much flat, but hidden in the end result was some real volatility. It felt like investors were trying to find a clearer direction, but none came.

Performance-wise, the TSX popped 1.40%, easily leading the pack. Its U.S. counterparts, though, struggled. The Dow nudged up 0.34%, and the S&P 500 was basically flat, up just 0.08%. The Nasdaq 100 ended slightly in the red, down 0.21%, as some of the steam came out of tech after its recent stretch.

Major Economic Stories

Recap of the Week

Quick Note: I was away last weekend, so I’m catching up on the most important economic stories of the past couple of weeks. My review of the most recent economic data painted a murky picture, with encouraging signs in Canadian employment, for a change, but at the same time we saw continued weakness in U.S. manufacturing and consumer sentiment. The overall tone leaned cautious, as the data showed resilience in some places and cracks in others.

Here’s how things have played out.

Canada Job Market Surprises with Strong Gains

Canada’s unemployment rate unexpectedly dipped as job growth beat forecasts.

October brought a very welcome rebound in Canada’s labour market, led by gains in both total jobs and falling unemployment. Most of the improvement came from core-aged men and younger workers. (Chart above) Still, long-term joblessness remained a stubborn issue.

• Employment rose by 66,600 to over 21 million total jobs

• Unemployment dropped to 6.9% versus expectations of 7.1%

• Youth unemployment saw its first decline since February

• Long-term unemployed made up 21.3% of the jobless population

U.S. Manufacturing Slips for Eighth Month

The ISM Manufacturing PMI dropped again, missing expectations.

U.S. factory activity continued to shrink in October, a clear confirmation of ongoing pressure in the manufacturing sector. Weakness showed up across production, new orders, and employment. Only a couple of industries managed to stay in growth territory.

• ISM PMI fell to 48.7, below the 49.5 forecast

• Production, inventories, and order backlogs all contracted

• Employment index declined as companies cut staff

• Only two major industries posted expansion in October

Consumer Sentiment Hits Near-Record Low

U.S. consumer confidence dropped sharply on shutdown fears.

Americans are growing more worried about the economy, with sentiment falling to levels not seen since mid-2022. Concerns over personal finances and future business conditions drove the pessimism. Higher-income households bucked the trend, boosted by stock market gains.

• Sentiment index fell to 50.3 from 53.6 in October

• Current conditions hit a record low of 52.3

• Year-ahead business outlook dropped 11%

• Inflation expectations split: short-term up, long-term down

Top Insights

Canada’s Job Market Sends an Interesting Signal

The drop in Canada’s unemployment rate to 6.9%, along with a solid jump in employment, is a surprise that might actually be meaningful, especially since most expected little to no improvement. I think this adds weight to the idea of some that Canada’s labour market is actually running relatively well, flying in the face of so much talk of economic cooling. Gains were broad enough to be taken seriously, and when you see youth unemployment ticking down too, it’s hard to ignore.

That said, I wouldn’t take this as a green light for any major policy shift just yet. Long-term unemployment is still elevated, and job gains don’t necessarily mean wage growth is accelerating. But if this strength holds through the end of the year, it may push the Bank of Canada to delay rate cuts longer than markets are pricing in. In summary, this report doesn’t change the trajectory yet, but it is worth paying attention to.

U.S. Manufacturing Can’t Catch a Break

Manufacturing in the U.S. has posted its eighth straight month of contraction. At this point, it’s not really about whether the sector is shrinking (it is) but more about how persistent the weakness has become. The October PMI came in below expectations again, and with production, orders, and hiring all under pressure, it’s starting to feel like we’ve entered a new baseline of softness.

Investors have largely priced in the slowdown so this won’t rattle markets on its own, but it does add to the case that economic momentum is fading. And with supply chain issues no longer a dominant factor, what we’re seeing now is more demand-driven. I’d be watching how this affects regional job markets, especially in industrial-heavy states, heading into Q1 next year.

Consumer Confidence Keeps Sliding, and That Matters

The University of Michigan’s consumer sentiment index fell to near-record lows, and honestly, it’s not hard to see why. Inflation is still sticky, economic uncertainty is rising, and all the drama surrounding the U.S. government shutdown drama isn’t helping. What stood out to me was that this drop in sentiment cut across almost all groups, except for the wealthiest households with strong stock exposure. That’s pretty telling.

When consumers start pulling back emotionally, it tends to show up in spending eventually.

And with the holidays approaching, retailers will be watching this data very closely. If sentiment doesn’t rebound soon, it could weigh on Q4 GDP through softer consumption, especially among lower- and middle-income households. This is the kind of data point that doesn't make headlines but quietly changes the narrative if it persists. For the record, my suspicion is that it will.

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

Some believe leadership plays a pivotal role in a company’s success, while others feel larger macro trends have a bigger impact. With Doug McMillon stepping down and John Furner taking over as Walmart’s new CEO, I’m asking: what’s going to matter more in the year ahead: the leadership change at the top, or broader consumer spending trends? Cast your vote below.

LAST WEEK’S POLL RESULTS

For the last poll, I asked what tone you felt Minister Champagne should have taken with the federal budget. 74% said it’s time to be bold, while just 26% preferred a more cautious approach. Clearly, most of you are ready for decisive action over restraint. The plan is now released, so we’ll see how things play out.

Reader Comments

Bold - It’s Time to Shake Things Up

“Cautious” is not something that the current economy allows us. Due to our long-term dithering we have an economy based of being controlled by the US. It is time for Canada to have a leader/government that is not afraid to lead the way and present us with new markets, new products, and new partners. We can not afford to take the path of wait and see. Yes we will have debt but if we do not rebuild (which costs money) we will have constant debt and not way to work our way out of the cycle. PM Carney is moving us in the right direction, new business, new wealth and new government income which pays off debt.” — entender1012

“Based on the comments from Mr. Carney I think there will be spending cuts and investment into diversification of trade partners.” — jdimigen

“Canada doesn't have the luxury of being cautious anymore given President Trumps protectionist policies. We need to stand on our own two feet and make things better for our country.” — michelleepereira

“It’s time to get our finances rebalanced(?) and pay down debt without wrecking our social net. How about a slight increase in taxes for the ultra rich!?” — duffman.porteous

“Nation building projects are expensive. I would like to see the Port of Churchill be expanded and have it become a major export and import hub.” — philip.swan

“So far the whole tone is about making changes in Canada's international trade situation, making big moves, so I expect that is what will happen with the budget. I dont know what he 'should' do, but I bet that is what he does do! The vote should be interesting given the minority government. Sounds like the Conservatives will vote against it, based on what Pierre is saying on the news today, and with everyone else playing their cards close to their chests...I put my money on it gets passed. Interesting times!” — mrrobpog

“Time for the govt to be responsible with our tax dollars. How about a new idea, keep our money in our country.” — postma.bill62"

CONSUMER STAPLES
Walmart’s CEO to Retire as Furner Steps In

• Doug McMillon is stepping down in January after over a decade

• John Furner, head of Walmart U.S., will take over as CEO

• Walmart has stayed strong by focusing on groceries and affordability

• Competitors like Target and Amazon are facing more bumps this year

I’ve been a Walmart shareholder for longer than I can remember, and this week’s announcement that CEO Doug McMillon is retiring this January after more than ten years as CEO caught my attention. The company is handing the reins to John Furner, who currently runs Walmart U.S. Now, if that name isn’t familiar to you, he’s been with the company since he was a teenager, and has worked his way up from an hourly job to the top. It’s a very “Walmart” kind of story, and that’s probably the point.

Furner knows the business inside and out. He’s been leading the U.S. operation since 2019 and helped guide it through the pandemic, a massive digital shift, and inflation pressure. This isn’t a flashy hire. Nothing dramatic. As I said… very ‘Walmart”-ish.

The company clearly wants to keep doing what’s been working: focus on groceries, value, and operational strength. There’s no sign of a strategy overhaul coming, and for investors, that’s probably a relief.

Compared to its competitors, Walmart has been a star. Target has stumbled with inventory and shifting demand, and even Amazon doesn’t touch Walmart when it comes to everyday essentials. Under McMillon, the company didn’t chase trends, rather it just got better at what it already did well. So with Furner stepping in, I don’t expect fireworks, but I do expect Walmart to keep being Walmart, and right now, that’s fine with me.

Read the Full Story Here

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CANADA REVEVUE AGENCY
CRA’s New Rules Push for Transparency

• CRA’s updated program narrows what counts as “valid” disclosure

• Stricter standards now apply to those with repeated or intentional errors

• Legal experts warn of more denials despite voluntary reporting

• Advisors are urged to act earlier and document everything

I’ve often quoted my personal accountant both here and in my YouTube videos, and the beat goes on with the new announcement that the CRA has revised its Voluntary Disclosures Program (VDP). Out of the gate, the changes are raising eyebrows within the tax profession community. The update removes some of the flexibility that advisors and clients have relied on for years, particularly around the handling of “offside” tax situations, cases where taxpayers haven’t followed the rules but want to come clean. The CRA is making it clear: if you knew what you were doing was wrong, expect fewer breaks.

The changes redefine what counts as a “valid” voluntary disclosure, and narrows the window for clients to come forward and receive full relief. The revised policy gives CRA more discretion to deny relief in cases it deems egregious, even if disclosure is voluntary. In other words, the CRA is moving away from a grace-based approach and leaning more into enforcement.

This matters for both advisors and clients because the risk calculus is changing. Advisors are now encouraged to disclose proactively, even in gray areas, because the cost of delay may be steeper. The CRA is also shifting language around eligibility to emphasize a stricter reading of intent and compliance history. There’s a clear signal here: the government wants to catch more aggressive tax planning before it becomes systemic.

Read More Here

FINANCIAL PLANNING & RETIREMENT
Fear Is Shaping Retirement Planning in Canada

• Many Canadians are taking CPP/QPP early out of fear

• Starting benefits too soon results in permanently lower payments

• Emotional decisions are often based on misinformation, not math

• Financial planners urge better education and trust in systems

A growing number of Canadians are delaying or scaling back retirement not because they want to, but because fear is forcing their hand. Many people worry that CPP/QPP benefits won’t be enough to cover even basic expenses, and that fear is driving decisions that might not be in their long-term interest. What’s surprising is how deeply emotional these decisions are. I’ve covered this off many times in YouTube videos, and I’ll link a few right here.

A Globe & Mail story this week highlights how misinformation and anxiety often push people to start benefits too early, locking in lower payments for life. In many cases, fear is robbing people of their financial futures. The reality is that waiting a few years can significantly boost monthly income, but many retirees are opting for the immediate (and lower) payout out of concern the system won’t be there.

In my opinion, this issue speaks to a bigger problem: trust in public systems is eroding, and that’s affecting personal finance decisions. Advisors are now spending more time talking clients off the ledge than optimizing retirement math. In this environment, simple education and reassurance may have more value than complex investment strategies.

Read the full story here.

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THE FINANCIAL CRISIS
More Canadians Skipping Bills to Buy Food

• 18% of Canadians delayed bill payments to afford groceries

• Inflation is forcing trade-offs between food and other essentials

• Survey shows growing anxiety around daily financial stability

• Credit risk and mental health are emerging long-term concerns

According to a new Nanos poll, a growing number of Canadians are putting off paying bills just to afford groceries. That’s a sad but concrete sign that financial stress is becoming deeply personal. Nearly one in five respondents said they’ve had to skip or delay other payments to cover food costs, highlighting the impact that high prices are having in reshaping household priorities.

The report points out what people are willing to give up to put food on the table, and notes the long-term risks to credit health, mental well-being, and economic stability. When food security starts eroding, consumer behavior changes dramatically.

Probably the most troubling part of this story is that the actual burden is falling directly on households. The emotional toll of deciding between groceries and rent is significant, and for many, it’s becoming a monthly reality. This level of strain will only get worse if the affordability crises worsens.

Read the full Story Here

OTHER NEWS FROM THE PAST WEEK

Reverse Mortgage Rates Threaten Retirement Plans
Rising interest rates are putting pressure on retirees who use reverse mortgages to fund their later years. Higher borrowing costs may erode equity faster and limit the appeal of this strategy.

Financial Facelift: Family Navigates Rising Costs

This week’s Financial Facelift explores how a young family balances homeownership, child care, and rising costs. Advisors offer practical steps to improve savings and long-term security without drastic lifestyle changes.

Ford Unveils New HQ Showroom in Dearborn
Ford has opened a modern showroom inside its new Dearborn headquarters, blending history and innovation. The space aims to connect with consumers while showcasing the company’s evolving EV and design strategy.

Bread Price-Fixing Settlement Deadline Approaches
Canadians eligible for compensation in the bread price-fixing case must file claims soon. The settlement applies to grocery shoppers affected by a long-running scheme to inflate the price of baked goods.

Sonder Files for Bankruptcy Protection
Short-term rental firm Sonder has filed for bankruptcy protection as debt and weak demand pile up. The company struggled to scale sustainably despite early pandemic-era hype and venture capital backing.

Fingerprints, Anyone? Snowbirds Face New U.S. Tax Filing Rule
Canadian snowbirds spending time in the U.S. will need to register more formally under new IRS rules. Failing to do so could trigger unexpected tax obligations or scrutiny from American authorities.

Blue Jays’ Playoff Run Fuels Ontario Economy
Spending in Ontario jumped during the Blue Jays' playoff push, offsetting weakness in other economic areas. Retail and hospitality sectors benefited most, showing how sports success can lift regional economies.

BBC Investigates Used EV Battery Market
A BBC investigation reveals safety and quality concerns in the booming secondhand EV battery market. Consumers face hidden risks as recycled batteries lack regulation and vary widely in performance.

America’s ‘K-Shaped’ Economy Deepens Divide
The U.S. economy is splitting further as affluent households thrive while many others struggle. Rising inflation and housing costs are deepening inequality, creating two very different financial realities under one economy.

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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