The Week in Review

Weekly Market Recap: U.S. and Canada

It was a shortened trading week, with the U.S. exchanges closed Thursday and open for a short session Friday in recognition of U.S. Thanksgiving. We saw mixed movements this week, driven by weak consumer confidence early on but offset by upbeat retail earnings and reasonable GDP data. Tech stocks underperformed as rising Treasury yields weighed on growth names, while energy stocks surged, helping the TSX outperform.

As for performance, the TSX led with a gain of 0.86%, followed by the Dow Jones at 0.59% and the S&P 500 at 0.58%. The Nasdaq 100 trailed, inching up just 0.15% amid pressure on tech stocks.

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

TSX Returns | Week At-a-Glance

Major Economic Stories

The North American economies gave us a mixed bag this week. Canada’s economy grew at a slower pace in Q3, with a 1% annualized growth driven by household and government spending but held back by weaker business investment and exports. Meanwhile, the U.S. showed solid momentum with personal income and spending on the rise. Inflation remains on everyone’s radar, with the Fed’s preferred measure, the core PCE price index, hitting a six-month high of 2.8% year-over-year. The big question now is whether central banks can keep things steady without making life more expensive. Here’s how things played out:

Canada’s Economy Grows 1%

Canada’s economy grew by 1% in Q3, thanks to stronger household and government spending.

The drawback to this report was that business investment and exports were weak, hinting that we may be seeing a slowdown. 

• Q2 growth was revised up to 2.2%.

• People spent more on vehicles and financial services.

• GDP per capita fell 0.4%, continuing a six-quarter decline.

• Rate cuts from the Bank of Canada are likely in December.

Inflation Stays Sticky in the U.S. 

The U.S. core PCE price index rose 0.3% in October, showing inflation is still a challenge even though we’re seeing dropping goods prices.

Services are driving the increase. 

• Service prices were up 0.4%; goods prices dipped 0.1%. 

• Year-over-year core inflation hit 2.8%. 

• October’s rise matched September’s pace. 

• Inflation in services continues to outshine goods. 

Americans Spend Big as Incomes Jump 

U.S. personal incomes grew 0.6% in October, the strongest gain in seven months, while spending kept up, rising 0.4%.

• Disposable income rose 0.7%, outpacing September’s 0.3%. 

• Spending hit $20.1 trillion annually. 

• Durable goods spending increased slightly. 

• Non-durable goods spending dipped a bit. 

Key Takeaways From this Week’s Economic News

Canada’s Growth Isn’t the Whole Story 

On paper, Canada’s 1% growth doesn’t sound too bad, but dig deeper, and you’ll see some red flags. Business investment and exports took a hit, showing cracks in the economy. Household and government spending did the heavy lifting, but falling GDP per capita suggests everyday Canadians aren’t necessarily feeling the benefits. With more rate cuts likely on the horizon, the Bank of Canada’s focus is clearly shifting to boosting growth. All eyes are on next week’s job numbers for more clues.

U.S. Consumers Keep Spending Despite Inflation 

Americans seem to be shrugging off higher borrowing costs, with incomes rising sharply in October and spending following suit. Services were the star of the show, from travel to healthcare, while spending on goods held steady. Inflation, especially in services, is still running hot, but there’s little sign that consumers are pulling back. For the Fed, this resilience is a double-edged sword—great for growth, but it makes cooling inflation that much harder.

What’s Going On With Inflation? 

Speaking of inflation, it’s proving to be a bit tricky right now. The Fed’s preferred measure, core PCE, climbed 2.8% year-over-year, driven by higher service costs. Meanwhile, goods prices actually dropped a bit. This split tells an interesting story: people are spending on experiences and services while cutting back on stuff. It’s a good sign for businesses relying on consumer activity, but the Fed probably isn’t feeling great about those sticky service prices. It’s a balancing act for sure—how much inflation is too much before something has to give? 

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

One of the biggest stories out there these days is the threat of large U.S.-imposed tariffs on goods bought from Canada. On one hand, many people are discounting it saying that it’s just Donald Trump pumping his chest and acting tough in order to influence trade terms, but there are others who are saying that this is a real threat, and our economy could take a massive hit when these tariffs kick in.
Where do you stand on this? Answer this week’s poll question and share your thoughts.

LAST WEEK’S POLL RESULTS

It wasn’t even close last week, with 80% of our readers saying that the GST Holiday and $250 cheques will not impact their spending holidays. I fall into that camp as well, however I will say that if we had any higher-ticket purchases planned in the next short while, it might have caused me to consider waiting until the change kicks in and save a few bucks.

THE DOLLAR
Loonie Hits a 4-Year Low on Tariff Threats  

• The Canadian dollar hit 71 cents US, its weakest since May 2020. 

• Donald Trump threatened a 25% tariff on Canadian and Mexican goods. 

• The loonie was already under pressure from rate cuts and weak growth. 

• Analysts believe the tariff threat may be temporary or negotiable. 

The Canadian dollar took a hit this week, dropping below 71 cents US after Donald Trump announced plans to impose a 25% tariff on Canadian and Mexican goods. The post, made on Truth Social, tied the tariff to border control and drug issues but isn’t formal U.S. policy yet. Still, it rattled markets already worried about Canada’s slowing economy. With the Bank of Canada cutting rates four times this year and economic momentum waning, the loonie has been on a steady slide since September.

What Could Happen Next?

Trump’s threats could simply be a negotiating tactic, and some analysts are optimistic this issue will cool off. Certain industries, like energy and auto manufacturing, may see exemptions due to the deeply integrated cross-border supply chains. I would say that I do agree that this stance by Trump is simply a strategy, but with his history of unpredictability, I think we need to be prepared for either outcome.

Impact on Canadians

For Canadians, a weaker loonie makes cross-border shopping and imports more expensive, hitting wallets just as Black Friday kicks off. On the flip side, a cheaper dollar could help exporters by making Canadian goods more competitive. For now, the loonie’s path forward depends on how seriously Trump follows through on his threats—and whether Canada negotiates a reprieve.

Read the Full Story here

THE ECONOMY
Canada’s Economy Slows to 1% Growth 

• Canada’s Q3 GDP grew 1%, matching market expectations but lagging the BoC’s 1.5% forecast. 

• Household and government spending were bright spots, but business investment and exports fell. 

• GDP per capita declined 0.4%, the sixth straight quarterly drop. 

• Economists expect another rate cut from the BoC in December. 

Canada’s economy grew at a slower 1% annualized rate in Q3, reflecting mixed conditions. Household and government spending propped up growth, with Canadians splurging on vehicles and financial services. Meanwhile, weaker business investment—particularly in machinery—and declining exports acted as drags. GDP per capita continues to fall, putting a spotlight on the disconnect between overall growth and individual economic well-being.

Policy and Projections

As I noted above, the Bank of Canada has been cutting rates to stimulate growth, with another cut expected next month. Yes, lower rates make borrowing cheaper, but they also signal concern about the economy’s slowing momentum. The upcoming employment report (this coming Friday) will play a key role in shaping the BoC’s next move.

What It Means for Canadians

Sluggish growth isn’t just a StatsCan metric, it has real-world implications, from slower job creation to tighter household budgets. For businesses, weaker exports and investment could limit expansion plans. The focus now shifts to whether rate cuts can reignite momentum—or if deeper challenges lie ahead for Canada’s economy.

Read the Full Story here.

HOUSING
Canadian Banks Gear Up for Mortgage Wars 

• Falling interest rates are setting the stage for increased mortgage competition. 

• More than half of Canadian mortgages will come up for renewal in 2025-2026. 

• Loan growth has been sluggish but is expected to rebound next year. 

• Analysts anticipate 2025 will bring opportunities to grow market share. 

Canada’s big banks are closing out a challenging year as they prepare to report Q4 earnings this coming week. Loan growth has been soft, and rising provisions for credit losses have dented profits. However, with interest rates falling since June, the landscape is shifting. Homeowners renewing their mortgages may look for better deals, and that could potentially spark a wave of refinancing activity.

What’s Driving the Mortgage Wars?

Analysts expect to see aggressive competition between banks as they look for new customers, as borrowing costs drop and as homeowners shop for the lowest rates. This could boost loan volumes but squeeze profit margins. The Bank of Canada’s rate cuts are already helping to stabilize the housing market, adding another tailwind for lenders.

Outlook for 2025

The coming year looks brighter for banks, with improved housing demand and better economic certainty. It’s true that credit risks still loom, especially for consumer debt like credit cards, but the easing of recession fears and lower rates are expected to support loan growth and profitability. Banks will need to balance competitive pricing with maintaining healthy margins—a delicate but potentially rewarding task.

Read the Full Story Here, or watch my YouTube report on the latest Credit Problems facing Canadians.

OTHER NEWS FROM THE PAST WEEK

Canadian Media Companies Sue OpenAI Over Copyright
Major Canadian media outlets have filed a lawsuit against OpenAI, alleging unauthorized use of their content to train its AI models. The case could set precedents for AI and intellectual property rights.

Bitcoin Nears $100K With 40% Monthly Surge
Bitcoin is on fire, rising nearly 40% in November and closing in on the $100,000 mark. Analysts point to increased institutional interest and favorable market sentiment as key drivers.

Why We Overspend During the Holidays
A deeper look into the psychology of holiday spending reveals emotional triggers and social pressures that drive overspending. Experts offer strategies to stick to a budget without losing the festive spirit.

Office Parties Go Sober: Alcohol Replaced by Activities
The hospitality industry is rethinking holiday office parties, moving away from alcohol and toward activity-based events like escape rooms and cooking classes to meet changing workplace expectations.

Questrade Announces Layoffs Amid Cost Cutting
Questrade has laid off an undisclosed number of employees as part of cost-reduction efforts. The move reflects broader challenges in the financial services sector amid economic uncertainty.

Are Airline Loyalty Programs Worth It?
Frequent flyer programs promise savings, but are they delivering value? A closer look at the perks, pitfalls, and hidden costs of airline loyalty schemes reveals who benefits most.

Market Movers

Top 10 Weekly Gainers

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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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