The Week in Review

Weekly Market Recap: U.S. and Canada

It’s great to be back after a little bit of R&R, and I’m looking forward to seeing what the rest of 2024 throws at us. In this newsletter, rather than looking at the normal 5-day chart of the major indices, I decided to extend that to 10 trading days, just to bring us up to date since I last reported prior to my vacation.

What I see is a story of a reasonable 10-day rally across the major indices, not without the usual ups and downs; in fact we saw some strong moves. First off, the markets popped following Donald Trump’s US Presidential re-election win, and then fell off to end the period. Corporate earnings added fuel to the rally, with many companies (Disney in particular) surprising to the upside. However, as the week progressed, there was some profit-taking, which trimmed gains but didn’t erase the broader uptrend.

Looking at the numbers, over the period the Dow Jones led the way with a strong 3.31% gain. The TSX followed closely, climbing 2.71%. The S&P 500 rose 2.48%, while the Nasdaq 100 saw a more modest but still solid 1.80% increase. Over this extended 10-day period, we again see investor sentiment as broadly positive, with all major indices ending well in the green.

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

TSX Returns | Week At-a-Glance

Major Economic Stories

I was only away for 14 days, but lots happened during that time. We saw Canada’s unemployment rate hold steady, inflation in the U.S. picked up, and the Federal Reserve cuts rates again.

Here’s how things played out:

Canada’s Job Market Holds, But Signs of Weakness Linger

Canada’s unemployment rate stayed at 6.5% in October, slightly better than expected.

But even thought the unemployment rate didn’t go up, job growth also didn’t hit targets, and labor force participation dropped to its lowest since early 2021. We did see improvement with youth employment, but more core-aged workers became unemployed, highlighting mixed signals in the labor market.

• Unemployment rate steady at 6.5%, below expectations for an increase.

• Net job growth of 14,500, falling short of the projected 25,000.

• Youth joblessness dropped significantly, but core-aged unemployment rose.

• Labor force participation dipped to 64.8%, the weakest level since January 2021.

U.S. Inflation Picks Up After Months of Declines

U.S. inflation rose to 2.6% in October, marking the first increase in seven months.

Energy costs didn’t drop as much as before, and shelter prices remained high, keeping inflation elevated. While food and transportation costs eased slightly, core inflation stayed steady at 3.3%, and this points to continued underlying price pressures.

• Annual inflation increased to 2.6%, up from 2.4%.

• Shelter inflation stayed at 4.9%.

• Food prices rose at a slower pace, while transportation costs eased.

• Core inflation remained steady at 3.3%, with services driving much of the increase.

Fed Cuts Rates by 25 Basis Points Amid Improving Inflation

The Federal Reserve reduced its target interest rate by 0.25%, pointing to progress in bringing inflation closer to its 2% target.

However, they remain cautious about uncertainties in the economic outlook and risks to their employment and inflation goals. The Fed reiterated its commitment to monitoring data and maintaining flexibility in future decisions.

• Target interest rate lowered to 4.5%-4.75%.

• Inflation is improving but remains above the Fed’s target.

• Labor market conditions have softened, with unemployment edging higher.

• The Fed will continue reducing its balance sheet as part of its broader strategy.

Key Takeaways From this Week’s Economic News

Canada’s Labor Market: Stability with Some Underlying Strains 

Canada’s unemployment rate staying at 6.5% is a decent outcome, especially since it avoided moving higher as some had predicted. But when you look closer, the lower labor force participation and softer-than-expected job growth signal that the market is losing momentum. These factors could weigh on household income and spending, which might lead to slower overall economic growth in the coming months. It’s a reminder that while things aren’t deteriorating rapidly, they aren’t fully stable either.

U.S. Inflation’s Slowdown Hits a Bump 

The slight uptick in U.S. inflation to 2.6% interrupts a seven-month streak of declines and suggests price pressures aren’t fully under control yet. Shelter costs remain a real factor, and the stability of core inflation at 3.3% highlights persistent challenges in cooling prices for services. For consumers, this means the relief many were hoping for may take longer to materialize, particularly as key expenses like housing and transportation remain elevated.

Fed’s Rate Cut Reflects Careful Optimism

The Federal Reserve’s decision to lower rates by 0.25% is a clear sign they believe progress is being made on inflation. That said though, their cautious tone suggests they’re not ready to declare victory just yet. Balancing inflation risks with the need to support the labor market will be a delicate task. This cut could help stimulate borrowing and investment, but it also carries risks if inflation proves more stubborn than expected. It’s a calculated move in a still-uncertain environment.

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

Ok, so this week’s poll question might be a bit controversial, depending upon which side of the fence you’re on. Our lead story this week is the ongoing Canada Post Strike, and I know I’ve personally felt the affect already, as I’m sure many have. So, here we go: Do you think the government should privatize Canada Post? Would love to hear your thoughts on this one.

LABOUR
Canada Post Strike: What You Need to Know 

• Canada Post strike halts mail delivery nationwide.

• Federal mediator Peter Simpson steps in to aid negotiations.

• Union claims Canada Post threatens layoffs and poor conditions.

• Businesses brace for holiday disruptions as pressure mounts. 

Canada Post’s mail service came to a grinding halt last Friday as 55,000 workers went on strike over unresolved disputes about wages, working conditions, and job security. Talks, which began on November 15, failed to produce a deal, and thus the Canadian Union of Postal Workers (CUPW) took action. 

The union accused Canada Post of refusing to address critical issues and threatening layoffs. Canada Post countered with an offer of 11.5% wage increases over four years, health benefits, and pension protections but said the union’s demands could worsen its financial woes. 

Government Steps In — But Stops Short of Intervention 

Federal Labour Minister Steven MacKinnon announced the appointment of mediator Peter Simpson to facilitate negotiations. However, Ottawa has no plans to legislate workers back to their jobs yet, emphasizing that "parties must reach a deal." 

MacKinnon may not hold this stance for long. Carleton University’s Ian Lee predicts mounting pressure from businesses and public bodies for Ottawa to intervene if the strike drags on. 

Businesses Scramble as Holiday Deadlines Loom 

Small business owners are already feeling the crunch. With Christmas and Black Friday approaching, many like Ontario entrepreneur Kim Dowds are pivoting to private couriers — an expensive workaround. For some in rural areas, pausing operations entirely is the only option. 

Santo Ligotti from the Retail Council of Canada says the timing of this job action can be harmful.

Dan Kelly of the Canadian Federation of Independent Business agreed that the timing is ‘really bad’ and says that it will send people ‘scrambling to try to get money’ from invoices that are already in the system.

Read the Full Story here

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Disclaimers:
This content is sponsored by BMO Exchange Traded Funds. This content has been prepared by Beavis Wealth and represents its assessment at the time of publication. Beavis Wealth is compensated under this arrangement by BMO Exchange Traded Funds.

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THE US FEDERAL RESERVE
Powell: No Rush for Fed to Cut Rates 

• Fed feels no urgency to cut interest rates.

• Economic strength supports a slower, careful approach.

• Trump’s policies could shake things up, but it’s unclear how.

• Inflation progress is happening but still uneven. 

Fed Chair Jerome Powell has made it clear: the U.S. economy is strong, and there’s no need to rush into rate cuts. With unemployment at 4.1% and growth chugging along at 2.5%, he feels the Fed has room to move carefully.

I think that’s a smart move. If the economy’s holding steady, why force things?

Trump Policies = Big Question Marks 

Here’s where it gets interesting—Trump’s return to office adds a wildcard. Will higher tariffs and tighter immigration policies mess with growth and inflation? Maybe, but Powell’s not speculating. "The answer is not obvious until we see the actual policies," he said. Honestly, I get that. Jumping to conclusions now could backfire. But it’s worth watching because these could be game-changers, and I’m leaning in the direction of some chaos in the early months of 2025.

Inflation and What’s Next for Rates 

Inflation progress is happening, but it’s not smooth sailing. Powell pointed out that while inflation is creeping closer to the Fed’s 2% target, it’s not there yet. (see above). Traders are banking on another small rate cut in December, but Powell hinted the Fed might pump the brakes on easing in 2025. 

To me, this all feels like a “wait and see” approach, which makes sense when the economy’s doing fine. But it’s a delicate balance, and Powell knows it. As he said, "We are watching carefully." Translation: the Fed’s not taking any chances, and honestly, I wouldn’t either.

Read the Full Story here.

TELECOMMUNICATIONS
Government Orders Review of Big Three Reselling 

• Canada’s telecom regulator must review resale rules.

• Resale rights at regulated prices could hurt small ISPs.

• Bell, Rogers, and Telus are divided on the issue.

• Independent providers fear market consolidation. 

The federal government is stepping into Canada’s telecom landscape, asking the CRTC to rethink whether Rogers, Bell, and Telus should resell internet on each other’s networks at regulated prices. This could bring a huge change to competition rules designed to help smaller players. It’s not a huge surprise that we see the government concerned—letting these giants bundle services and undercut smaller internet providers could squeeze out regional competitors. Industry Minister François-Philippe Champagne made it clear: Ottawa wants to ensure small providers remain viable while also encouraging infrastructure investment. 

The Industry Reacts 

Here’s the twist: the Big Three are split on this. Bell and Rogers are against letting major carriers access each other’s networks at set prices, arguing it’s bad for competition and investment. Telus, though, broke rank, already reselling Bell’s fibre network in Ontario and Quebec and saying it’s "a new entrant" in those regions. Personally, it seems like Telus is playing the long game here—they’re leveraging the system to grow outside their Western Canada stronghold. 

Independent providers, meanwhile, are raising red flags. Groups like Cogeco, Eastlink, and CNOC argue that if the Big Three dominate with bundled discounts, smaller ISPs without wireless services won’t stand a chance. "Short-term consumer benefits could lead to long-term market consolidation," they warned. That’s a chilling thought. 

What’s Next? 

The CRTC has 90 days to review this policy, and a lot’s riding on their decision. It’s a tough balance—protecting small ISPs while encouraging fair competition and investment. If nothing else, this debate shows just how messy Canada’s telecom market really is.

Read the Full Story Here

HOUSING
Canada’s Housing Market Springs Back to Life 

• Home sales surged 30% year-over-year in October.

• National sales rose 7.7% month-over-month.

• Lower mortgage rates and higher supply are key factors.

• Prices are stabilizing, with a 6% annual increase. 

October’s home sales came as a pleasant surprise, jumping 30% compared to last year. Nationally, over 44,000 properties changed hands—a 7.7% increase from September. The surge was especially strong in the Greater Toronto Area and B.C.’s Lower Mainland, thanks to an uptick in listings from September. CREA senior economist Shaun Cathcart explained that new supply in September set the stage for October’s activity. 

I think this rebound has been brewing for a while. Buyers sidelined by high mortgage rates are finally feeling encouraged by the Bank of Canada’s rate cuts. Rates have dropped four times since June, most recently by 50 basis points in October, and stand at 3.75%.

Buyers and Sellers Adjust to the Market 

Jason Ralph from Royal LePage noted that while activity picked up, it’s a gradual shift rather than a pandemic-style frenzy. Sellers are more confident as prices stabilize, and buyers, sensing fewer bargains, are starting to meet them halfway. As Ralph put it, “Buyers were going, ‘Where’s my deal?’ and sellers were going, ‘I still want my price.’” It seems the gap is finally narrowing. 

What’s Next for Housing? 

Economists like Robert Kavcic say the market is finding its footing, with sales volumes recovering and prices stabilizing. October’s average sale price of $696,166 is up 6% from last year, signaling demand strength. With rates expected to drop further and supply tightening, Cathcart hinted October’s numbers could be a preview of what’s to come in spring 2025. 

Personally, I think the market is entering a new phase where cautious optimism reigns—buyers are getting back into the action, but it’s certainly not a free-for-all just yet.

Read the Full Story Here

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OTHER NEWS FROM THE PAST WEEK

TikTok Creators Fear Full Ban After Canadian Office Shutdown 
Canadian TikTok creators are alarmed after the government forced the app to shut its Toronto and Vancouver offices over national security concerns. They fear this move signals a potential nationwide ban. 

Alberta Pension Fund Rocked by Government Overhaul 
In a dramatic shake-up, Alberta’s government ousted AIMCo’s executives and board, asserting direct control over the $169 billion pension fund. Critics warn the intervention could destabilize the institution. 

Canadian Dollar Hits Four-Year Low, More Declines Likely 
The Canadian dollar has dropped to its weakest point against the U.S. dollar since 2019, with analysts predicting further losses. Experts cite higher consumer debt and economic underperformance as key factors. 

Canadian Tire Reports Higher Profits Amid Consumer Weakness 
Canadian Tire's Q3 profits rose to $200.6M despite CEO Greg Hicks noting consumer confidence is at historic lows. Economic pressures like rising unemployment and mortgage renewals could worsen the outlook. 

Kraft Heinz Faces Mac & Cheese Lawsuit Over "No Preservatives" Claim 
A judge ruled Kraft Heinz must face a lawsuit alleging its Mac & Cheese contains synthetic preservatives, contradicting its "no artificial preservatives" label. Kraft Heinz denies misleading consumers. 

Top News Anchors Earn Millions Annually Despite TV’s Decline 
TV news faces competition from digital media, but top anchors like Sean Hannity and Diane Sawyer still rake in millions, with Hannity leading the pack at $45 million per year. 

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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