on a personal note…

I’m genuinely humbled by how many of you tune in to The Pulse each week to stay informed about the latest news and economic developments—and to hear my take on it all. This little newsletter consistently ranks well above the average open rate for financial newsletters, and that’s entirely because you choose to open your email and make time for what I have to share. Thank you so much.

Of course we can all use some downtime, and just so you know, I’ll be taking a few weeks off to visit friends and family, so I appreciate your patience during this brief break. We welcomed a new granddaughter into our lives yesterday, and she already loves her grandpa so much she chose my birthday to be born! 😊 So once again, family will be taking top priority while she (and Mom, Dad and sister) get used to their new lives.

What does this mean for The Pulse?

Next week, I’ll be on the road and won’t be publishing an edition. The two weeks after that, I’ll publish a trimmed-down version. I’ll still share “the numbers,” so to speak, but I’ll be pausing the longer-form stories, as they take significantly more time to put together.

Thanks again for your continued support and understanding. I look forward to getting back to the regular format in mid-July. Happy early Canada Day for our Canadian subscribers and likewise, Independence Day for our American readers.

The Week in Review

Weekly Market Recap: U.S. and Canada

Another fairly shaky week for major stock markets is now in the books. Investors were kept on edge as we saw continued concerns over trade policy, central bank commentary, and slowing economic data. The markets struggled to find positive momentum and ultimately drifted lower into Friday.

Looking at the numbers, the Dow Jones dropped 1.77%, the steepest decline among the major indices. The Nasdaq 100 fell 1.31%, just slightly more than the S&P 500, which was down 1.28%. Meanwhile, the TSX held up better than its U.S. counterparts, dipping only 0.38% on the week.

Major Economic Stories

Recap of the Week

This week’s economic stories focused on policy cautions from the Bank of Canada and the Fed, as well as signs of consumer strain, in the form of slowing retail activity and mounting financial stress.

Here’s what we learned this week.

Bank of Canada Deliberations

The Bank of Canada held its key rate at 2.75% earlier this month, and this week we got some colour on what the committee discussed as they deliberated.

The Governing Council weighed the risks of persistent trade uncertainty and its impact on inflation and growth. Deliberations focused heavily on U.S. tariff unpredictability and the potential consequences for Canadian exports and price stability. The BoC made clear that while the door remains open for further easing, the current environment warrants patience and flexibility.

• Lack of clarity on future U.S. tariffs raised downside risks

• Threats of additional trade actions clouded the growth outlook

• Elevated inflation expectations called for a more cautious stance

• Uncertainty around U.S. trade policy directly impacted BoC projections

Canada Retail Sales Likely Fell Sharply in May

Early estimates suggest a steep drop in Canadian retail sales.

The 1.1% decline marks the worst month since early 2023, and is likely driven by tariff-induced pressure on consumer budgets. Official data for May was slightly more positive but also revised lower, a surefire signal of fragility in consumer spending.

• Preliminary May estimate: -1.1% month-over-month

• Official May increase: 0.3%, revised from 0.5%

• Motor vehicles and books saw strong gains

• Gas station sales fell sharply, though volumes rose

U.S. Retail Sales Slump Ahead of Tariff Concerns

American shoppers also pulled back in May as tariffs loomed.

Retail sales dropped 0.9%, the steepest decline in four months, as uncertainty and cost pressures weighed on discretionary spending. Auto and building supply sectors saw the biggest setbacks.

• U.S. retail sales fell 0.9% in May

• Motor vehicle sales plunged 3.5%

• Gas station sales dropped 2%

• Downward revision to April retail sales

Fed Holds Rates, Signals Caution Ahead

The Federal Reserve left interest rates unchanged once again.

Chair Jerome Powell acknowledged softening uncertainty, but still held rates at 4.25%–4.50% as the central bank monitored the economic effects of trade and immigration policy. Future rate cuts remain likely but fewer and later than previously forecasted.

• Fourth straight hold by the Fed

• GDP growth forecasts downgraded for 2025 and 2026

• Inflation expected at 3.0% in 2025

• Fed sees two cuts this year, only one in 2026 and 2027

Key Takeaways From this Week’s Economic News

Bank of Canada’s Hold Reveals Strategic Anxiety

The Bank of Canada’s decision to pause at 2.75% earlier this month wasn’t surprising, but the reasoning behind it says a lot. What stood out in this week’s statement was how deeply trade instability is shaping their outlook. They’re clearly not comfortable cutting further when U.S. tariff policy could swing again overnight. The Governing Council emphasized risks around exports, inflation expectations, and global uncertainty, so even though growth is soft, they’re staying cautious.

The way I see it, this is the kind of moment where monetary policy becomes less about inflation targeting and more about risk management. They’re not committing to a new direction, which means markets, and borrowers, are stuck watching headlines instead of data. I think the pause is defensive more than optimistic, and future cuts are still possible, but only if trade risks cool off meaningfully.

Retail Sales Highlight Consumer Hesitation

The latest retail sales data from both Canada and the U.S. point to a clear trend: consumers are spending less, and confidence is shaky. Canada’s preliminary May figures show a 1.1% decline, potentially the biggest drop in over two years. In the U.S., the 0.9% drop in May sales was the steepest fall since January, with big hits in autos and home improvement.

What’s interesting, and a tad confusing perhaps, is that we’re not seeing panic, just restraint. Consumers aren’t pulling back across the board, they’re just dialing things down. That kind of behavior signals caution, but people aren’t worried about a full on collapse. That said, if this becomes the norm heading into Q3, I’m thinking it could drag on GDP and force both central banks to reconsider their hold positions. It’s not the kind of consumer retreat that sparks a recession, but it definitely lowers the odds of any chance of a strong recovery.

Fed Projects Slower Growth, and It Matters

The Federal Reserve’s updated projections show a subtle but important shift: growth is cooling, inflation is lingering, and rate cuts are getting pushed further out. GDP growth estimates were revised down to 1.4% for 2025, while inflation forecasts were nudged up. That may seem minor, but in central bank terms, it points to a longer runway before conditions normalize.

For investors, the takeaway leaves little doubt: rate cuts are coming, but the timeline has stretched. Two cuts are still expected this year, but just one more in 2026 and 2027 combined. That’s a big change from earlier assumptions of a more aggressive easing cycle. It tells me the Fed is trying to balance a still-warm economy with persistent inflation, but without triggering renewed volatility. Expect more “long and shallow” policy adjustments rather than any dramatic pivot.

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

Two stories I cover in this week’s newsletter point to a troubled consumer. On one hand, consumer spending is slowing noticeably in both Canada and the U.S., a clear sign that people are holding back. On the other, credit card debt is rising fast, especially among younger and financially vulnerable Canadians. Both point to economic strain, but which one worries you more?

LAST WEEK’S POLL RESULTS

Last week I asked how our readers feel about the relatively cautious tone Bank of Canada Governor Tiff Macklem is taking when it comes to interest rate decisions. About two-thirds who answered the poll believe that the Bank is striking a reasonable balance.

Reader Comments

Only one comment this week, but it’s a doozy! Don’t forget; when you answer the weekly poll question, you’re invited to share your thoughts.

"I feel one thing Canada must be is more agressive in everything we do. We have a rogue state just to the south and if we follow Mr Carney's lead we will follow his agressive aproach instead of the cons sissy aproach. The government is making more moves toward Europe and ASEAN which we need. With the G7 meeting in Canada this week, we can show the rogue gov. that they are nothing to us or the rest of the world. But wait for it the "Whiney Boys " will start with their big whine - Oooh PP would do such a good job but he lost, Oooh Carney is such a bad person & does not know what he is doing, Ooooh the Orange Iguana is such a great guy. Well thats the Whiney Boys - 25 to 45 years old, mostly from Alberta & Ontario, whine about how badly they are treated by women, and they are not treated well by non whiney's. If these guys spent half as much time Thinking instead of Whining maybe they would get somewhere. Farewell America - The Emaculate Rogue State." - entender1012

MORTGAGE RATES
Mortgage Rates Hinge on Trade Deal Progress

• BoC likely to hold rates if trade deal materializes

• Fixed-rate mortgages could ease with lower bond yields

• Job market uncertainty may still prompt another cut

• U.S.-China talks and global sentiment remain key factors

For months now, mortgage rates in Canada have been along for the ride as we’ve watched all the global trade politics, and there are glimmers of hope that we might be entering calmer waters. This big news this week is President Trump and Prime Minister Carney confirming they’re committed to wrapping up a new Canada-U.S. economic deal within a month. That’s a welcome tone, and if they can pull it off, it should keep variable mortgage rates steady, and maybe even nudge fixed rates a little lower.

Trade Politics Driving Rate Outlook

This seems less about where rates “should” go and more about what risks the Bank of Canada is trying to manage. With the BoC holding steady at 2.75%, they’re clearly trying to balance inflation risks with trade-related uncertainty. As BMO’s Robert Kavcic put it, these rates are now in the “normal” zone, so unless things unravel, we might not see much more movement.

Bond Yields Still the Wild Card

Fixed-rate mortgages are a bit trickier. They move with the bond market, and that’s still reacting to U.S. headlines. If we get positive signals from the U.S.-China front too, (full disclosure, I’m hopeful but not holding my breath) bond yields could dip, and that would help bring down fixed mortgage costs. But as CIBC’s Benjamin Tal pointed out, any real improvement in affordability depends on a broader sense of global stability.

Housing Demand May Perk Up, A Little

Another question; could this be enough to turn the tide for housing? Maybe. CREA’s Shaun Cathcart thinks so, at least modestly. I agree, with rates still high, affordability remains a ceiling. But for some sidelined buyers, even a little clarity could bring them back into the game.

Read More Here

HOUSING
Canada’s Housing Market: Signs of Life, But Tepid

• May home sales up 3.6% month-over-month, down 4.3% annually

• National average price fell 1.8% to $691,299

• Listings rose 13.2%, but still below long-term average

• Buyers remain cautious due to high mortgage rates

Staying on the housing topic, we finally saw a bit of a spark in Canada’s housing market this May. Sales were up 3.6% from April, the first monthly increase in over six months. That’s the good news. The bad news? Sales are still down more than 4% from this time last year, and average home prices actually dipped a bit. So yes, it’s better, but we’re far from booming.

Buyers Still Cautious, But Less Scared

A lot of the hesitation lately hasn’t been about affordability alone, it’s been uncertainty. According to CREA’s Shaun Cathcart, the early-year chaos around tariffs really sidelined buyers. Now that trade tensions are easing, confidence is starting to return, even if borrowing costs haven’t moved much.

Inventory Is Climbing, But Prices Aren’t

We’re seeing more listings, up 13.2% year-over-year, which usually signals improving seller sentiment. But with the average national price falling to $691,299, buyers aren’t exactly bidding aggressively. As BMO’s Robert Kavcic put it, the market is subdued, but it’s not sliding off a cliff.

This Market’s in a Holding Pattern

So here we sit. Unless we get a meaningful drop in mortgage rates (and soon), I think this “meh” momentum is probably going to stick around, and I don’t think we’re not looking at a major rebound just yet. Let’s call it a ‘reset’ phase more than a recovery.

Read More Here

CONSUMER CREDIT
Credit Data Flashes Red for Vulnerable Canadians

• Credit card balances rising despite lower monthly spending

• Repayment rates fell from 60% to 47% since 2022

• Serious delinquencies surge among monoline and thin-file borrowers

• BoC watching credit data as a key household stress signal

One of the more concerning stories I read this week came from FICO’s new credit card data, showing some early cracks, especially among younger and lower-income borrowers. More people are leaning on credit, and more are starting to fall behind.

Delinquencies Ticking Up in Riskier Groups

The red flags are especially clear among “monoline” borrowers, those using credit cards from firms that don’t offer full banking services. That group just saw the highest rate of missed payments in five years. These are the folks with thinner credit files and less financial cushion, so when living costs rise or hours get cut, they feel it fast.

Spending Drops, But Balances Rise

Here’s the most puzzling part of this story: monthly spending actually dropped 4.2% from last year, but credit balances went up anyway. On average, Canadians now carry $3,098 on their cards, and they’re paying down just 47% of it, way down from the 60% peak we saw during the pandemic. That’s a real-time signal of household strain.

This Could Shape Rate Decisions

The Bank of Canada is paying close attention to this, so much so that Deputy Governor Sharon Kozicki even called credit data a “real-time window” into consumer health. If this trend deepens, the BoC might be forced to reconsider its hold. Like the consumer story this week, it’s not panic time, but it’s definitely something to keep an eye on.

Read the full story here.

OTHER NEWS FROM THE PAST WEEK

Kroger to Close 60 Stores Nationwide
Kroger’s plan to shutter 60 stores reflects strategic cost-cutting as it adjusts to tighter margins and evolving consumer habits in a competitive grocery market.

The Edge Pizza Shop Finds Viral Fame
A small-town pizza shop is making national headlines after going viral, showing how local businesses can harness social media to punch well above their weight.

AI Music Battle: Deezer vs. Spotify
The battle over AI-generated music intensifies as Spotify and Deezer diverge on how to handle synthetic content, raising legal and ethical questions for the music industry.

Do You Need $1.54 Million to Retire, Or Is It $2.1 Million?
Retirement planning just got murkier: new data shows wildly different estimates depending on lifestyle expectations, inflation outlook, and investment returns.

Hudson’s Bay Former Landlords Oppose Ruby Liu Stores
Hudson’s Bay’s former landlords are clashing with new tenant Ruby Liu over lease terms, complicating plans to repurpose shuttered department stores across Canada.

WestJet Cyberattack Remains Unresolved One Week In
WestJet’s cyber breach remains unresolved a week later, raising concerns about data security even as the airline insists operations continue without disruption.

Tesla to Build China’s Largest Grid-Scale Battery Plant
Tesla is doubling down on energy storage, announcing it will build China’s largest battery plant, solidifying its role in the global clean tech race.

Trump ICE Raids Spotlight Immigration Policy
Trump-era immigration raids have ramped up again, drawing attention to ICE tactics and the broader economic and human toll of stepped-up enforcement.

Walmart to Pay $10 Million in FTC Fraud Settlement
Walmart will pay $10 million to resolve FTC claims over money-transfer scams, renewing the spotlight on big retailers’ role in consumer protection.

Spanish Court Rejects Airbnb Appeal, Orders 66,000 Listings Blocked
A Spanish court has dealt Airbnb a major blow, ordering 66,000 listings removed in a decision that could reshape global short-term rental regulation.

Tips to Dodge Bait-and-Switch Pricing and Avoid Junk Fees
Video: A consumer guide on avoiding bait-and-switch pricing and junk fees offers practical strategies for sidestepping hidden costs when shopping or booking services.

Here’s a fun snapshot from Otis Worldwide Corporation (OTIS), today a $37 B elevator giant, which you probably know from one of the most dramatic sales pitches ever. Back in 1854, founder Elisha Otis climbed onto a raised platform at New York’s Crystal Palace and dramatically cut the hoisting rope in front of a panicked crowd. The platform dropped a few inches… and then stopped. Calmly he proclaimed, “All safe, gentlemen.” That moment wasn’t just theatrical flair—it kicked off a skyscraper boom by proving elevators were really safe

And here’s a quirky twist: Otis didn’t just stick to boring office towers. In the 1990s they engineered the free-fall motion for Disney’s spooky Twilight Zone Tower of Terror ride, basically their elevator tech got twisted into thrill-ride form .

So yeah, Otis elevators have quite literally taken us from death-defying demos to adrenaline-fueled amusement parks, all in a day’s lift!

Market Movers

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

TSX Returns | Week At-a-Glance

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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