The Week in Review

Weekly Market Recap: U.S. and Canada

If you believe death and taxes are the only things in life that are guaranteed, I’ll argue you can add “the markets, whether it be up or down, will be volatile.” Once again, we saw big movements across major North American indices this week. Tech led the charge, but the rally was fairly well distributed, and investors seemed comfortable leaning back into growth as economic data came in steadier than feared.

Looking at the numbers, the Nasdaq 100 was the standout on this U.S. holiday-shortened week, with a 5% jump, while the TSX moved higher by about 4.2%. The S&P 500 finished up around 3.7%, and the Dow rose roughly 3.2 %. A solid week all around, and the strength in tech was hard to miss.

Major Economic Stories

Recap of the Week

Overall, the economic picture this week felt a bit uneven. In Canada, we saw a headline rebound while underlying demand softened and the US delivered mixed signals of its own.

 Here’s how it all played out.

Canadian GDP Rebounds in Q3

Canada’s economy staged a noticeable rebound in the third quarter, setting up a debate about how strong the recovery really is.

The headline number looks great at first glance. GDP grew at an annualised 2.6%, reversing the 1.8% drop in Q2 and landing well above forecasts. The lift came largely from trade, with imports falling 8.6% while exports posted a modest 0.7% gain. Investment also helped, especially in residential structures which jumped 6.7%, and government capital spending rose sharply with a 12.2% increase. That said, household spending slipped 0.4%, which ties into a broader theme of consumers still pulling back. The quarter-over-quarter figure of 0.6% growth tells the same story: a solid rebound helped along by weaker imports and sizable government-backed capital outlays, including an 82% surge in spending on weapon systems.

•  Household spending softens further in Q3

• Capital investment boosted by government outlays

• Trade balance improves as imports fall 2.2%

• Inventory accumulation slows across major categories

US Durable Goods Orders Rise Again

US manufacturers saw another month of improving demand, thanks to solid orders across several major categories.

New orders rose 0.5% in September after a strong 3.0% increase in August, with transportation still contributing but no longer dominating the way it did last month. Vehicles rose 0.4% and defence aircraft jumped 30.9%, though both slowed from earlier surges. The real story this month was broader strength across electrical equipment, primary metals, and computers, all of which recorded healthy increases. If you take transportation out of the equation, orders rose 0.6%, and the closely watched measure of non-defense capital goods excluding aircraft climbed 0.9% for a second straight month. The suggestion here is that businesses are continuing to place steady bets on equipment even though the broader economic outlook is still cloudy.

• Electrical equipment sees 1.5% increase in September

• Primary metals rise 1.4% month over month

• Capital goods ex-aircraft jump 0.9%

• Transport sector normalizes after earlier spike

US Retail Sales Cool in September

American consumer spending slowed, giving retailers a more uneven month as categories split between modest gains and noticeable declines.

Retail sales rose only 0.2%, the weakest increase in four months, and came in below expectations. Categories like miscellaneous retailers, gasoline stations and health and personal care stores posted solid gains, but several discretionary areas pulled back. Sporting goods fell 2.5%, clothing dropped 0.7% and nonstore retailers also slid. Auto-related spending dipped 0.3%, and that weighed on the headline figure. More importantly for GDP tracking, the control-group measure fell 0.1% after a 0.6% rise in August. It looks like underlying consumer momentum may be losing a bit of steam as the year winds down.

• Control-group sales slip 0.1% in September

• Miscellaneous retail leads gains with 2.9% jump

• Autos and parts drop 0.3% month over month

• Clothing and nonstore categories show notable pullbacks

Top Insights

Canada’s GDP Rebound Is Not as Strong as It Looks

I’m going to flat out say that I think the headline number makes the economy look healthier than it feels. A 2.6% annualised gain sounds impressive, but so much of the improvement came from imports falling rather than from broad strength. When imports drop because households are spending less, it usually tells us demand is cooling rather than heating up. What I’m watching now is whether this pattern continues into Q4, because a recovery built on softer consumption and government capital spending can flip quickly. If consumer weakness deepens, the strong GDP headline may turn out to be a one-off instead of a trend. Time will tell.

Durable Goods Suggest Businesses Still Have an Appetite for Investment

There’s something interesting in the US durable goods data that I don’t think we should overlook. We saw continued strength in non-defense capital goods, and that tells me businesses are still committing to equipment even as economic uncertainty builds. And that’s interesting. That usually signals confidence in medium-term demand or, at the very least, a belief that productivity upgrades are worth the investment right now. I am watching this closely because business investment often turns before the broader economy. If this measure holds up, it could cushion any slowdown coming from the consumer side. I guess I’ll keep my fingers are crossed on this one.

US Consumers Are Starting to Slow, and That Matters for 2026

In a bit of a contrast to the durables report, the pullback in retail sales feels like an early hint that consumers might finally be running out of steam. I think the control-group decline is the more important piece because it ties directly into GDP. We’ve had months of relatively resilient spending, but a softer print here might be a sign that the cushion is thinning. Is this a trend or simply a pause? If households continue to ease off, it could weigh heavily on early-2026 growth, especially with borrowing costs still relatively high and savings buffers mostly gone.

TOP STORY
Carney and Smith Set New Energy Pact

• New deal maps out pipeline route to B.C.

• Ottawa pauses climate rules for Alberta

• Carbon capture takes centre stage in the plan

• Private companies get July 2026 deadline

Big, maybe huge, news in the Canadian energy sector this week. Ottawa and Alberta have teamed up on an energy deal that will try to reboot Canada’s approach to big projects. The headline element is a new path for a pipeline from Alberta to the B.C. coast, paired with fresh commitments on carbon capture and new electricity investments. Alberta also gets some relief from federal climate rules while the two sides sort out what long term energy development should look like. The basic idea is to give industry a clearer path to invest, but nothing happens until private companies actually pitch a proposal. For the time being, it is a political handshake that sets the stage for what could be a major shift in Canada’s energy strategy.

Policy Changes and Project Details

The deal creates a Major Projects Office that is supposed to cut through the usual slow grind of federal approvals. Alberta can now put forward a privately funded pipeline idea, and Ottawa says it will get a simpler review process. The agreement also ties Alberta’s regulatory pause to bigger carbon capture plans from oil sands producers and new electricity infrastructure that could support everything from industrial growth to data centres. Both sides are selling it as a way to compete globally and open new markets for Canadian energy.

Political Reaction and What Comes Next

Not everyone is thrilled. Imagine that. B.C. officials and coastal groups have immediately raised concerns about tanker traffic and environmental risk. Environmental advocates say the deal relaxes climate rules at the wrong time. Supporters argue it could bring jobs, investment and some long overdue clarity. The real test is whether any company steps up before next summer. Until then, this is a roadmap with a lot of political heat but a long way to go.

Learn more here.

The new energy pact between Ottawa and Alberta has kicked off a big debate about what actually happens next. There is political momentum behind the agreement, but the real hinge point is whether investors step up and how B.C. responds. With so many moving parts, it feels like the next year will say everything about where this pipeline story goes.

I invite you to weigh in on this week’s question:

LAST WEEK’S POLL RESULTS

In last week’s poll, I asked what long-term model Canadians think would keep Canada Post alive. The results were close, with a leaner model in the lead at 38% and full privatization just behind at 36%, while a hybrid approach trailed at 26%. Thanks to everyone who voted.

Reader Comments

I always look forward to seeing what our readers have to say in this section, but for some technical reason, apparently the comments weren’t recorded last week. I’m sure there were some wise words of wisdom, but they are forever lost to the ether.

Sorry for the glitch, but I’m looking forward to reading your input on the energy question this week. ✅

TECHNOLOGY
Google Pushes Into AI Chips

• Improved Gemini 3 runs on Google’s custom TPUs

• TPUs create real competition for Nvidia’s GPU lead

• Meta is considering TPUs for its data centres by 2027

• AI chip choice could widen as cloud providers diversify

Just like the energy story, I’d also classify the Google Gemini 3 story this week as a big one. Gemini 3 is giving Google’s in-house chips a real moment. The model runs on Tensor Processing Units, or TPUs, and early users say the speed and reasoning improvements are noticeable. That performance boost matters because it shows TPUs can handle the kind of heavy AI workloads that have mostly belonged to Nvidia’s GPUs. If big tech companies start seeing TPUs as a solid alternative, the AI-hardware market suddenly becomes a lot more interesting.

The Chip Market is Shifting

A more competitive chip landscape could mean lower costs and fewer bottlenecks for companies trying to scale AI. Meta kicking the tires on TPUs is especially telling, since a shift like that would signal real confidence in Google’s hardware. TPUs also give developers another option for running large models without being tied to GPU supply, which has been a headache for the entire industry.

Nvidia at Risk of Losing Market Share

The big question is whether TPUs will be able to prove themselves outside of Google’s own environment. If they perform well at scale for third-party customers, Nvidia’s long-held dominance starts to look less certain. If not, we’re back to GPUs ruling the stack. Either way, this is the first time in a while that Nvidia has had a serious challenger, and speaking only for myself, I like this potential shake-up.

Read the full story here.

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THE CANADIAN ECONOMY
Economists Question Canada’s GDP Rebound

• Headline growth hit 2.6% in Q3

• Imports dropped sharply while exports inched higher

• Government investment surged across major capital categories

• Household spending slipped, signalling softer underlying demand

As we look at in the economic section above, Canada’s Q3 GDP number looks great at first glance, but the details might tell a different story. The big jump came mostly from falling imports and a hefty rise in government capital spending, including a sizeable bump in defense-related investment. Household spending pulled back and business investment stayed pretty flat, which makes the rebound feel more like a statistical lift than a broad-based upswing. Economists were quick to flag that domestic demand is still soft, even if the headline number says growth is back.

Will the Momentum Hold?
A quarter like this can look strong on paper while still leaving the economy on shaky footing. Governments won’t maintain this level of capital spending forever, and a slowdown in consumer activity tends to show up in later quarters, so if private-sector demand doesn’t pick up the momentum we’re seeing now may fade faster than people expect. That’s why many economists are treating this rebound as temporary rather than a turning point.

Watch for the ‘Bump”
The next few months will show whether this was a one-off bump or the start of something more stable. Stronger consumer spending or firmer business investment would help confirm a real recovery, but without that, the Q3 number might end up being the high point rather than the baseline.

Learn more here.

INTERPROVINCIAL TRADE
Alcohol Industry Still Pushing to Break Trade Barriers

• Interprovincial rules still limit alcohol movement across Canada

• Producers say outdated restrictions hurt small businesses

• Premiers face growing pressure to modernize the system

• Consumers could see lower prices and more choice if rules change

Canada’s alcohol producers are once again calling out the messy patchwork of interprovincial trade rules that make it hard to ship wine, beer, and spirits across the country. These restrictions have been around for decades, and the industry says they’re holding back growth, especially for smaller producers trying to scale beyond their home province. The latest push comes with a sense of urgency, since demand patterns are shifting and more customers expect to buy directly from producers without all the regulatory hoops.

The Quirk that Won’t Go Away
Interprovincial barriers are one of those uniquely Canadian quirks that most people forget about until they try to order a bottle from another province and run into a roadblock. Removing or easing these rules could open up meaningful opportunities for smaller wineries, breweries, and distillers that aren’t big enough to navigate the current system. It’d also give consumers better access to products that already exist within the country but can’t legally cross borders without added cost or paperwork.

What Happened to ‘Elbows Up’?
Since the big U.S. tariff hullabaloo started earlier this year, the pressure has been building. Progress isn’t a given though. Provinces guard their alcohol monopolies closely, and reform usually moves slowly. When the ‘elbows up’ campaign kicked off, there was a lot of talk about these alcohol-related barriers being taken down, but we haven’t seen the progress many would have liked. Still, the industry is pushing harder than it has in years, and premiers are hearing from both producers and consumers. If even a few provinces start to loosen their rules, others may eventually follow.

Read the full story here.

OTHER NEWS FROM THE PAST WEEK

BC vows crackdown on rising extortion threats
British Columbia officials pledged tougher action as extortion attempts surged against local businesses, prompting renewed coordination between police agencies and community leaders to reduce threats, restore safety, and address growing public concern.

Supreme Court allows investor lawsuits over disclosure failures
Canada’s Supreme Court confirmed that investors will be able to sue companies for withholding material information, marking a significant shift toward stronger transparency standards and a higher duty of accountability for firms managing sensitive financial disclosures.

Russia’s wartime economy shows mounting structural pressure
Russia’s war-driven economy is straining under military spending, labour shortages, and weakening consumer activity, raising fresh concerns about sustainability as policymakers juggle stabilisation efforts, inflation risks, and deepening geopolitical uncertainty.

Chevrolet launches nostalgic Memory Lane holiday ad
Chevrolet’s new holiday campaign leans heavily on family nostalgia, using sentimental scenes and classic models to strengthen emotional brand ties and capture attention in a competitive advertising season filled with big-budget automotive spots.

Waymo robotaxis face tougher traffic compliance rules
Arizona regulators introduced clearer enforcement standards for Waymo’s autonomous vehicles, defining responsibility for infractions and ensuring driverless systems follow consistent traffic rules as deployment expands across increasingly complex road conditions.

Arrest warrant issued for Miss Universe owner
A Bangkok court issued an arrest warrant for the Thai owner of the Miss Universe pageant over alleged financial misconduct, intensifying scrutiny of the organisation as investigators examine disputed transactions and broader operational concerns.

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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