Market Recap: U.S. and Canada

As always, we start with a recap of how the markets performed this week. The short version; not well. Markets were under pressure for most of the week as investors processed the geopolitical tensions coupled with a softer set of economic data. The war pushed energy markets higher and added volatility across equities, with virtually no periods of calm.

From a returns perspective, losses were widespread across major benchmarks. The Nasdaq 100 held up best with a decline of 1.27%, followed by the S&P 500 down 2.02%. The Dow Jones fell 3.01%, while Canada’s TSX posted the weakest performance of the group, sliding 3.61% for the week.

Major Economic Stories This Week

U.S. Job Market Suddenly Contracts

U.S. nonfarm payrolls fell by 92,000 jobs in February, sharply missing expectations for a 59,000 increase.

The decline was led by a 28,000 drop in health care employment linked to strike activity, including a 37,000 decline in physician office jobs, though hospitals added 12,000 positions. Other sectors also weakened, with information employment down 11,000, federal government jobs falling by 10,000, manufacturing declining by 12,000, and transportation and warehousing shedding 11,000 roles. Previous months were revised lower as well, with December payrolls revised from 48,000 to a loss of 17,000 and January trimmed slightly to 126,000. Combined revisions removed 69,000 jobs from earlier estimates, confirming the labour market had already been softer than previously thought.

• Average hourly earnings increased 0.1% during February payroll report

• Private sector payrolls declined by 81,000 jobs overall

• Average workweek for private employees held steady at 34.3 hours

• Long-term unemployment remained above 1.2 million workers nationwide

Unemployment Rate Edges Higher

The U.S. unemployment rate rose to 4.4% in February, up from 4.3% in January and approaching the four-year high of 4.5% reached last November.

The number of unemployed Americans increased by 203,000 to 7.57 million, while total employment fell by 185,000 to 162.91 million. Labour force participation dipped slightly to 62.0% as the labour force itself grew only marginally by 18,000 workers. Interestingly, the broader U-6 measure of unemployment, which includes discouraged and underemployed workers, improved slightly to 7.9% from 8.1%. 

• Prime-age labour force participation held near 83.5% in February

• Average hourly earnings rose roughly 0.2% month over month

• Average workweek for private employees remained steady at 34.3 hours

• Long-term unemployment remained above 1.2 million workers nationwide

Consumer Spending Shows Early Signs Of Cooling

U.S. retail sales fell 0.2% in January from December, the first decline since October and broadly matching expectations.

Several major categories pulled back, including motor vehicles and parts dealers, which fell 0.9%, gasoline stations down 2.9%, clothing and accessories stores down 1.7%, and electronics and appliance retailers down 0.6%. Other areas held up better, with furniture sales rising 0.7%, building materials and garden equipment up 0.6%, miscellaneous retailers gaining 2%, and online sales climbing 1.9%. The retail control group, which feeds directly into GDP calculations, rose 0.3%, suggesting consumer spending may still support overall economic growth. On a yearly basis, retail sales were still up 3.2%.

• Retail control group rose 0.3%, supporting first-quarter GDP estimates

• Non-store retailers posted strong 1.9% monthly sales growth

• Furniture store sales increased 0.7% during January

• Building materials and garden equipment sales climbed 0.6%

TOP INSIGHTS

Labour Market Cracks Are Starting To Show

For most of the past two years, the labour market has been the economy’s safety net. Even when inflation surged or interest rates climbed, job growth kept consumers spending and kept recession fears at bay. This week’s payroll report cracks that narrative a little. We got a negative jobs print, paired with downward revisions to prior months, and that combination suggests hiring momentum may have been weaker than many believed.

Something I can’t help but notice is just how broad the weakness looked across industries. Manufacturing, transportation, government, and parts of the information sector all pulled back at the same time. That kind of cross-sector slowdown often shows up before broader economic shifts. One soft report alone doesn’t signal a recession, of course, but when hiring momentum fades, it changes the tone for both markets and policymakers.

Overall, the labour market still feels relatively stable, but the margin for error is shrinking. When job growth slows, wage bargaining power softens and consumer confidence tends to follow. That matters because consumer spending has been carrying so much of the economic expansion. Like I say, we may be seeing cracks that will only get wider.

Consumers Are Still Spending, But The Mix Is Changing

I’ve mentioned this many times in this newsletter over the past number of months, how surprising it’s been to see how consumer spending has been one of the most resilient parts of this economy. Even with higher borrowing costs and persistent inflation, households have continued to open their wallets. But this week’s retail sales report hints that behaviour may be shifting under the surface.

The overall decline in retail sales was just modest, but the category breakdown tells a more interesting story. Big-ticket discretionary purchases like vehicles, clothing, and electronics weakened, while home-related categories and online retail held up better. That pattern often signals consumers becoming more selective with spending rather than pulling back entirely.

I do believe now that what we’re seeing is a transition from post-pandemic spending enthusiasm toward something more cautious. Households are still spending, but they’re prioritizing essentials, value, and convenience. If that trend continues, it could reshape earnings expectations across entire sectors. Retailers focused on discretionary goods may feel more pressure, while home improvement, discount retail, and e-commerce platforms could continue capturing a larger share of consumer dollars.

Geopolitics Is Back On The Market Radar

For most of the past year, markets have been focused almost entirely on interest rates, inflation, and economic growth. This week was a reminder that geopolitics can quickly reclaim the spotlight.

The war in the Middle East has pushed oil prices higher and injected fresh volatility into global markets. Energy markets tend to react first when geopolitical risk rises, and it doesn’t take long for the ripple effects to spread. Higher oil prices feed directly into inflation expectations, transportation costs, and household fuel bills. And when energy spikes suddenly, it complicates the outlook for central banks that are already trying to balance slowing growth with lingering inflation pressures.

What I’m watching now is how persistent this risk is. Markets can absorb short bursts of geopolitical tension fairly easily, but if we see prolonged instability in a major energy-producing region, it will have broader economic consequences. If oil prices remain elevated, it will put upward pressure on inflation just as economic growth begins to cool. And nobody wants that scenario.

TOP STORY
Oil Markets Jump On Iran Conflict Risk

• Oil prices spike as geopolitical tensions rattled energy markets

• Traders quickly priced potential supply disruption into futures

• Middle East instability returns as major market risk factor

• Energy volatility spreading into broader global financial markets

As I’ve highlighted above, the oil markets reacted sharply this week as conflict between the United States and Iran pushed traders. Brent crude rose about 8.5% in a single day, while U.S. benchmark West Texas Intermediate jumped roughly 12%, sending both prices above $90 per barrel. Over the course of the week, the move was even more dramatic, with Brent climbing roughly 27% and WTI spiking nearly 36% as investors rushed to hedge against potential supply disruptions. The Middle East remains one of the most important oil-producing areas in the world, and when geopolitical risk rises there, traders tend to price in supply threats almost immediately.

Why Oil Reacts So Quickly

Energy markets are often the first place geopolitical risk shows up. Iran sits near critical global shipping routes, including the Strait of Hormuz, where a large portion of the world’s oil exports pass every day. Any threat to that flow can ripple through global energy supply chains. At the first hint of instability, traders begin factoring in higher risk premiums, which can push prices higher very quickly.

What Investors Are Watching Now

For investors, the big question is how long it will take the for conflict to stabilize. Short bursts of geopolitical tension often trigger temporary spikes in oil prices, but if we get prolonged instability, it can have deeper economic consequences. Higher oil prices can feed directly into inflation expectations, transportation costs, and corporate margins. That makes energy markets an early signal for broader economic pressures.

Read the full story here.

The military actions in the Middle East have pushed oil markets back into focus, and traders are trying to gauge how long prices could stay elevated if the situation escalates. Energy markets tend to react first when geopolitical risks rise, and even the threat of supply disruption can move prices quickly.

Please vote on this week’s question:

LAST WEEK’S POLL RESULTS

In last week’s poll, I asked what readers believed was the clearest signal from the Supreme Court’s ruling on trade authority. The responses showed strong interest in the broader implications, with most readers viewing the decision as a meaningful shift in how tariff power could be interpreted and challenged going forward. Thanks to everyone who voted.

CORRUPTION
Prediction Markets Face Insider Trading Questions 

• Large geopolitical wagers raised concerns about privileged information

• Prediction platforms now facing growing calls for oversight

• Regulators examining how sensitive events are traded online

• Debate rising over transparency in event-based financial markets

Prediction markets are suddenly under the microscope after large wagers predicting potential military action involving Iran appeared shortly before tensions escalated. In January, I posted a YouTube video that explains these platforms and shows how they allow users to place bets on real-world outcomes ranging from elections to geopolitical events. In this case, the timing of several large trades raised concerns that participants may have been acting on information not widely available to the public. The episode has sparked new debate about whether prediction markets are simply aggregating public sentiment or creating opportunities for individuals with inside knowledge. AKA; corruption.

A Rapidly Growing Financial Niche

Prediction markets have gained traction in recent years as alternative forecasting tools. Economists, analysts, and researchers sometimes use them to gauge public expectations about political or economic outcomes. Because participants are risking money, supporters argue the markets can produce surprisingly accurate forecasts. That credibility has helped platforms grow quickly and attract more sophisticated traders.

Where Oversight May Head Next

However, incidents like this highlight the grey areas these platforms operate in. If traders with privileged government or intelligence information participate, it raises serious fairness concerns. Regulators may now face pressure to clarify whether prediction markets should operate more like financial exchanges, with stronger oversight and transparency requirements.

Learn more here.

TARIFF AFTERMATH
Businesses Wait For Long-Delayed Tariff Refunds

• Companies still waiting months to recover tariff payments

• Government building system to process large reimbursement backlog

• Trade policy shifts left billions tied up in refunds

• Businesses hoping new system will unlock stalled capital

A large number of U.S. companies may soon receive long-awaited refunds tied to tariffs imposed during earlier trade disputes, and officials at U.S. Customs and Border Protection say a new system designed to process these reimbursements could be ready within roughly 45 days. The refunds relate to duties collected on imported goods that were later rolled back or challenged, leaving businesses waiting months to recover the payments. For companies with large import volumes, those delayed refunds have effectively tied up significant amounts of working capital.

Why The Refund Backlog Built Up

The issue stems from complex trade policies and legal disputes surrounding earlier tariff measures. Companies often paid duties upfront while the policies were being challenged or renegotiated. When changes occurred, those payments became eligible for reimbursement, but the administrative systems responsible for processing them weren’t able to keep up with the volume of claims.

What Happens If The System Launches

If the new process launches as planned, it could help clear the backlog and speed up future refunds. For businesses, recovering those funds could improve cash flow and ease financial planning after months of uncertainty. It also highlights how long policy changes can take to filter through the administrative side of government programs.

Read the full story here.

Airlines Are Getting Tougher With Problem Passengers: United Airlines is tightening the rules in the skies, giving itself broader authority to ban travellers who cause trouble onboard. The move comes as airlines try to curb disruptive incidents and keep increasingly packed flights running smoothly.

Canaccord Pays A Costly Lesson In Compliance: Canadian investment firm Canaccord is paying more than $100 million after U.S. regulators flagged failures in its anti-money-laundering controls. The penalty shows just how expensive compliance mistakes can become in today’s regulatory environment.

Trump Wants Washington To Step Into College Sports: Donald Trump is pushing for federal involvement in college athletics, arguing the current system around athlete compensation has become chaotic. If Congress steps in, it could reshape the rapidly growing business of college sports.

Algonquin Power Investors Hit The Panic Button: Shares of Algonquin Power plunged after the company slashed its 2027 outlook, shaking investor confidence in the utility’s growth plans. The sharp sell-off highlights how quickly sentiment can turn when expectations suddenly shift.

The New Retirement Reality For Canadians: Canadians now say they need about $1.7 million to retire comfortably, according to a new survey. The problem? Many don’t believe they’ll actually reach that goal, underscoring rising financial anxiety around retirement planning.

Burger King Jumps Into Viral Fast Food Drama: Burger King wasted no time capitalizing on a viral moment involving McDonald’s leadership, releasing its own taste-test video to fuel the rivalry. It’s another reminder that in fast food, marketing battles never really cool off.

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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