Market Recap: U.S. and Canada

It’s hard to say which is the biggest story this week; the Dow Jones topping 50,000 for the first time ever, or the extreme volatility we saw across the board, especially in the tech sector. Also, it looks like we can confirm a rotation back into some beaten-down areas, with the industrials shining. Overall, volatility was the name of the game.

As for the numbers, the Dow Jones Industrial Average led the way to that all-time high, up 2.50% on the week. The TSX followed with a solid 1.63% gain, the S&P 500 finished essentially flat, slipping 0.10%, and the Nasdaq 100 lagged, ending down 1.87%.

Major Economic Stories

Economic Recap

Labour reports led the economic news this week and we were handed a welcome sign of improvement in consumer sentiment. As I always say though, it’s important to take a look beyond the headlines, and this week is no exception.

Here’s what we learned.

Canada’s Jobless Rate Falls, But For The Wrong Reasons

The unemployment rate fell to 6.5% in January, but the improvement came with some uncomfortable trade-offs beneath the headline.

The jobless rate fell in large part because fewer people actively looked for work, rather than from strong job creation. The labour force shrank by roughly 94,000 people, which pulled participation down to 65.0% and reversed recent gains. Total employment declined by 25,000, with a sharp drop in part-time roles, even as full-time employment rose modestly. The data show cooling momentum in hiring, with labour market slack easing more because of disengagement as opposed to demand.

• Participation is weakening across multiple age groups

• Part-time losses signal consumer-facing sectors under pressure

• Lower unemployment masks softness in overall job creation

• Labour supply trends complicate the policy outlook

U.S. Job Openings Slide To Pandemic-Era Lows

Job openings fell to 6.5 million in December, the lowest level since 2020 and far below expectations.

Declines were broad-based, with notable pullbacks in professional services, retail, and finance, and were visible across every major region. Hiring and separations held steady, a sure sign that firms are slowing expansion as opposed to actively cutting staff. The sharp drop in openings points to reduced bargaining power for workers and a labour market that is normalizing quickly.

• White-collar hiring demand is retreating fastest

• Employers are freezing growth rather than shedding workers

• Worker leverage continues to fade

• Labour market rebalancing is accelerating

Consumer Sentiment Improves, But Confidence Remains Uneven

The University of Michigan’s sentiment index rose again in February, led almost entirely by households with significant stock exposure.

U.S. consumers are feeling slightly better, although optimism is still fragile and unevenly distributed.

Perceptions of current finances and buying conditions improved modestly, but longer-term business expectations slipped. Inflation expectations eased meaningfully over the next year, although longer-term expectations ticked higher again. It was nice to see the improvement, but beneath the surface concerns about job security and high prices are still weighing on households without asset exposure.

• Stock market gains are driving confidence for wealthier households

• Lower inflation expectations may ease near-term spending fears

• Job security concerns remain widespread

• Sentiment gaps highlight growing economic inequality

TOP INSIGHTS

A Lower Unemployment Rate Can Still Signal Weakness

Canada’s latest jobs report is a good example of why headline numbers can mislead. The unemployment rate fell, but in large part because fewer people were looking for work, not because hiring accelerated. And that’s a big difference. When participation drops, it often reflects caution or fatigue rather than optimism.

For the average family, this can feel like standing still. Jobs are technically available, but hours shrink, flexibility disappears, and the path to better pay feels narrower. That then leads to slower spending, even if layoffs are limited. From a policy perspective, it muddies the signal. The labour market isn’t overheating, but it’s not clearly deteriorating either.

The participation number is what’s catching my attention the most. If more people step away, the unemployment rate may keep falling for reasons that don’t reflect real strength.

U.S. Labour Demand Is Losing Altitude

The sharp drop in U.S. job openings tells me the rebalancing in the labour market is moving faster than many expected. We’re hearing a lot about mass layoffs in the tech space, but more broadly, companies aren’t aggressively cutting staff although they are clearly pulling back on expansion, especially in white-collar and service-heavy sectors.

That matters because job openings tend to shape worker confidence more than layoffs. When postings disappear, employee bargaining power fades, which typically means fewer outside options and more caution around big purchases or job changes.

If we see hiring stay flat while openings keep falling, that combination would point to a labour market that is cooling through reduced opportunity rather than outright job losses.

Consumer Confidence Is Improving Unevenly

I was pleased to see another increase in the Michigan survey data this month, but I find the latest consumer sentiment data revealing for what it leaves out as much as what it shows. Confidence is rising, but mainly among households with stock exposure. For everyone else, sentiment remains stuck at depressed levels. That’s not as comforting as the chart first suggests.

That split matters because it can shape how growth unfolds. Asset-owning households may feel comfortable spending, while others remain defensive. It also helps explain why economic signals can feel contradictory depending on where you sit.

What I’m watching next is whether lower inflation expectations translate into broader confidence gains. If they don’t, the gap between financial markets and lived economic experience may widen further.

TOP STORY
Back-To-Office Mandate Sparks Union Showdown

• Public servants ordered back four days weekly

• Unions file labour complaint during contract talks

• Strike votes emerge as a real possibility

• Workplace changes collide with job cut fears

A new federal directive is setting the stage for a major labour confrontation between Canada’s largest public sector union and the Federal Government, with public servants being required to spend more time in the office starting this summer. Executives will be expected onsite five days a week in May, and most other federal employees will have to report to the office at least four days a week beginning in July. The announcement seemed to catch unions off guard and, right out of gate, tensions escalated.

Union leaders argue the policy was introduced at the worst possible moment, as departments are simultaneously notifying workers their jobs may be affected by upcoming cuts. The Public Service Alliance of Canada says the government is unilaterally changing working conditions while collective bargaining is underway, and that has prompted an unfair labour practice complaint. Union officials also question whether departments even have the physical space to accommodate the shift, and warn that productivity could suffer rather than improve.

Union Backlash And Legal Escalation

A big element in the dispute is that union leaders say hybrid work was already negotiated into existing agreements and view the new mandate as a breach of trust. They say that previous return-to-office rules have failed to deliver measurable benefits and that pushing further risks inflaming already frustrated workers. Some unions are openly discussing strike mandates, and are framing the dispute as both a labour rights issue and a test of how the government values flexibility in a modern workforce.

Government Rationale And What Comes Next

The government says the policy is about strengthening service delivery and ensuring the public service can meet rising demands. Officials acknowledge the timing is difficult and say discussions with unions are planned to smooth implementation, but still, with job reductions looming and labour talks ongoing, the fight over where work happens may become a flashpoint for broader dissatisfaction inside the public service.

 Read the full story here.

Hybrid work has become one of the most contentious workplace issues in both the private and public sectors, and now the federal government is pushing for clearer rules and unions argue for flexibility. How do you feel about remote vs. in-office work mandates? I know opinions vary widely on whether one approach can really fit every role, and I’m keen to hear what our readers think. Here is this week’s poll question:

LAST WEEK’S POLL RESULTS

In last week’s poll, I asked whether Trump’s choice for Fed chair is really about lower rates or about influence. A clear majority saw it as influence rather than policy. For the record, I fall into the majority this week. Thanks to everyone who voted.

READER’S COMMENTS

Influence

"Overall, I think it's about influence and over the short term that likely means lower rates. I simply can't see the new Fed Chair coming in and 'going rogue' from the get-go.

It's no secret that Warsh's in-laws (the Lauders as in Estee) have close personal and political ties to Trump and with that, Trump likely thinks that'll give him overarching influence over Warsh's monetary decisions.

Will that prove true over the long term? Selfishly, I hope we never find out because that would mean Trump is gone. A guy can wish right?

FWIW... I think Warsh gets confirmed with minimal pushback and will take the chairmanship in May. While Warsh wouldn't be my pick, this is probably about the 'best' possible pick we could get from Trump IMO. TBD on Fed independence..." — callawayguy

"Trump is for Trump not for the betterment of the country or markets" — eccodog

"Trump blamed Jerome Powell every time FED didn’t cut rates. Trump only wants to boost economy in the short term (at least his term) and brag it as one of his great accomplishments." — tochitocchi

THE STOCK MARKET
Dow Breaks 50,000 As Markets Rebound

• Dow hits historic milestone after volatile week

• Investors rotate away from crowded tech trades

• AI spending plans fuel both optimism and anxiety

• Market leadership broadens beyond mega-cap technology

The U.S. markets staged a remarkable comeback to end the week, and the Dow Jones Industrial Average closed above 50,000 for the first time as investors stepped back into sectors that had been hit hardest during recent volatility. The rally followed several rough sessions, but by Friday buyers appeared more comfortable leaning into value-oriented and cyclical names, and that helped drive broad gains.

We also saw a notable shift in leadership. Industrials, materials, energy, and financials outperformed, while tech struggled, even with Friday’s strong rebound. Some of the biggest moves came from companies tied to infrastructure and manufacturing, suggesting a renewed appetite for areas that have lagged during the tech-heavy run of recent years.

AI Enthusiasm Meets Valuation Reality

Anxiety around AI spending was front and center. The world’s largest technology firms announced sharp increases in capital expenditures to build out data centres and computing capacity, and that news reignited questions about profitability timelines. Chipmakers spiked on expectations of sustained demand, but some software names struggled as investors weighed the risk of margin pressure and rising competition. As a result, there was sharp dispersion within tech, rather than a broad selloff. To some extent, that helped.

What The Rebound May Be Signalling

As I mentioned in the market recap above, the Dow’s outperformance points to growing investor interest in earnings stability and cash flow reliability over pure growth narratives. According to FactSet data, 75-79% of S&P500 firms that have reported so far this earnings season have beaten expectations, and the markets seem willing to look past near-term uncertainty. If this rotation continues, market strength may become less dependent on a narrow group of technology leaders and more resilient to shifts in sentiment.

Read the full story here.

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HOUSING
Power-Of-Sale Listings Climb Across Ontario

• Mortgage arrears push homes toward forced sales

• Financial stress emerges months after payment trouble begins

• Lowball sales risk rippling through neighbourhood prices

• Buyers face added risk with as-is properties

A huge story is being written in the Ontario housing market, and I think it’s flying a bit under the radar. What are known as power-of-sale listings are rising across Ontario, and it’s adding pressure to an already soft housing market. It’s also confirming the growing financial strain we’re seeing among some homeowners. A power-of-sale listing is a home put up for sale by a lender after the owner falls behind on mortgage payments, allowing the bank to sell the property to recover the outstanding debt without a full court foreclosure process. Something that has been long predicted in the Canadian market, rising mortgage renewals at higher rates are a big part of this story, but experts say the roots also often trace back to aggressive borrowing during the ultra-low-rate period earlier in the decade.

Industry professionals note that many homeowners stretched themselves using lines of credit or refinancing to purchase additional properties or cover rising costs. When rates climbed and prices cooled, those highly leveraged owners were often the first to run out of options.

Why Forced Sales Can Move Markets

Another angle of this situation is that power-of-sale transactions can influence surrounding home values, especially if lenders accept lower offers to move properties quickly. Lenders are required to seek fair-market value and typically work through realtors, but these homes may still sell for less due to deferred maintenance or the as-is nature of the sale. Those lower prices can then be used as comparables, weighing on neighbouring listings.

What To Watch Next

Experts caution that power-of-sale activity still represents a small slice of total listings, but its impact can grow if volumes rise. These sales also add supply to a market already struggling with weak demand, and that reinforces downward pressure on prices.

Read the full story here.

THE SUPER BOWL
Why The Super Bowl Costs So Much

• Ticket prices reflect scarcity and luxury demand

• Most seats allocated before fans ever get access

• Wealthy buyers dominate the secondary market

• Prices likely have not reached a ceiling

I’ve never personally been to a Super Bowl game, but every year I watch ticket prices with a sense disbelief. It seems as though as every year goes by, the event has literally turned into a luxury experience. I had a look on StubHub this morning, and for Super Bowl LX at Levi’s Stadium this year, the cheapest resale tickets I could find were $3,500 (in Section 419 no less) and many seats, especially closer to the action, are selling for more than $10,000. A quick search tells me that some premium seats have sold for as much as USD $59,000. There was no mention of whether that included popcorn.

Fun Fact: My sister Jacquie performed at The Superbowl XVI halftime show, way back in 1982. She’s since stopped performing, thus freeing up a spot for Bad Bunny’s appearance this year. 😜

What makes today’s prices even crazier is how limited the supply actually is. The NFL gives most tickets to the teams, sponsors, broadcasters, and partners long before fans ever get a shot. What’s left for the public often goes into lotteries or directly into the resale market, where prices get pushed up based on what wealthy buyers are willing to pay.

Scarcity By Design

The league’s ticket distribution system creates built-in scarcity. Players, team staff, and corporate partners get first access, leaving only small slices for people outside those groups. That lack of supply, paired with huge demand, is why even “discounted” resale tickets still cost thousands.

Why Prices Will Stay High

Another thing I find interesting, perhaps frustrating is a better word, is who ends up buying these tickets. Super Bowl crowds tend to skew toward wealthier households, and that gives sellers confidence that high prices will find buyers. Even when prices soften a bit right before kickoff, they rarely dip into what most fans would call affordable territory.

Read the full story here.

BONUS POLL QUESTION

Millions missing from digital wallets: Small amounts of money are slipping through the cracks in everyday digital payments, and when you add them up, they’re no longer so small. It’s raising fresh questions about where the money goes and who’s supposed to notice.

Ottawa pitches new auto strategy: Ottawa is talking big about the future of Canada’s auto sector, with electric vehicles front and centre. The real question is whether ambition and announcements will translate into durable jobs and long-term competitiveness.

Bank watchdog fines BMO: Another reminder that even the biggest banks trip up sometimes. Regulators dinged BMO over compliance issues, keeping pressure on financial institutions to clean up the fine print and internal processes.

Canadian Tire hit with false advertising fine: Canadian Tire got caught stretching the truth on pricing, and it came with a hefty penalty. It’s a timely reminder for shoppers to be skeptical when “sales” start to feel permanent.

Eight stocks tied to aging demographics: Canada’s population is getting older, and investors are starting to follow the money. This piece looks at companies positioned to benefit from demographic reality, not hype.

Musk’s trillionaire ambition: Elon Musk’s next goal is as bold as you’d expect. The path runs through multiple companies, big bets, and a lot of execution risk, which makes it fascinating whether you’re cheering or skeptical.

Europe’s political uncertainty grows: Political noise is picking up again across Europe, and markets are paying attention. Even small shifts in stability can ripple into currencies, growth expectations, and investor confidence.

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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