We are back after a brief hiatus that allowed Sam and co to make there way back from South America, where the team managed to successfully mix business and pleasure. Equity markets have been mildly positive over the past week while bond yields have risen just over 10-bps. The crypto currency market continues to be volatile. Bitcoin dipped down to $86,327 before recovering. While anything more than a week is eternity in the crypto space, we did have a similar bout of volatility in the spring.
| Index | Close Nov 27th 2025 | Close Dec 4th 2025 |
| S&P500 | 6,813 | 6,858 |
| TSX60 | 31,197 | 31,478 |
| Canada 10 yr. Bond Yield | 3.13% | 3.26% |
| US 10 yr. Treasury Yield | 4.00% | 4.11% |
| USD/CAD | $1.40312 | $1.39577 |
| Brent Crude | $62.54 | $63.31 |
| Gold | $4,160 | $4,208 |
| Bitcoin | $91,320 | $92,180 |
Source: Trading Economics & Factset
Canada’s GDP growth surprised to upside for the 3rd quarter. The 2.6% annualized rise was a big jump from Q2’s 1.8% drop. The number does mask some of the weakness in the Canadian economy. Imports were down as consumers tighten their wallets while exports made a modest gain. GDP numbers for 2022 through 2024 were revised upwards. The revisions show a stronger economy going into the tariff dispute as well as higher than thought productivity. While these numbers are better, they are still somewhat lacklustre. The numbers do point to no changes in interest rates by the Bank of Canada in the near term.
While economic numbers in the US need to be taken with a grain of salt, thanks to the government shutdown, they are pointing to some weakness in the economy. The jobs numbers are a bit mixed but, ADP reports that payrolls declined in November. November also saw a decline in manufacturing as higher input prices and slumping sales had companies pulling back. One of the ironies of this tariff induced slowdown, is companies offshoring some operations to avoid the higher input costs caused by the tariffs (steel, aluminum….). Those products would have been built in the US for export and now will be built overseas to service non-US markets. Taking all of this into account, markets are pricing in an interest rate cut by the US Fed next week.
Never bet against the US consumer. Despite the cracks showing in the economy, US consumers increased their spending over the Black Friday / Cyber Monday shop-a-palooza weekend. There were some sharp differences in spending patterns though. On-line sales were up 9.1% while overall sales were up 4.1%. Lower wage shoppers were pulling back opting for lower cost gifts while upper income shoppers continued to splurge. The latter can be at least partially attributed to the “wealth effect” of a rising stock market.
Competition is causing some ripples in the AI space. Nvidia has been the market leader in chips for the AI industry for the past few years. Now Google is challenging their dominance with its in-house chip and cloud services. But it is not just hardware (chips) or cloud services. OpenAI (ChatGPT) founder Sam Altman declared a code red emergency at the company after the release of Google’s latest AI (LLM) upgrade Gemini 3. Watch this space accelerate as AI developers and supporting acts scramble to stay ahead – or even just keep up.
There were some changes in the Canadian banking industry this week. The Big-6 are all fine, but the next tier down is seeing some consolidation. 175 yr. old Laurentian Bank has been broken up and sold. The retail branches have been acquired by National Bank, while the business and wholesale operations have been sold to Fairstone Bank. Next to go was President’s Choice Financial which has been acquired by Equitable Bank. Both Equitable and Fairstone are Charter 1 Canadian banks. In the meantime, the Big-6 have all reported higher than expected earnings this week.
It is the end of an era in Crofton BC. Domtar announced the permanent closure of it pulp mill in the Vancouver Island village this week. The mill which had been built by BC Forest Products in 1957 had struggled in the past few years with a shortage of fiber and declining markets. Ironically it had been importing wood chips from the US to maintain production. Softwood lumber tariffs had reduced sawmill operations in BC, where pulp mills would traditionally sourced most of their chips. But the move from print to digital has really been the death knell of the mills.
Industry slowdowns and mill/factory closures are nothing new in Canada. Whether it is the forest industry in BC, steel mills in Hamilton, a car plant in Oshawa, or the cod fishery on the East Coast the closures have shaped the country by forcing workers and their families to find new horizons and opportunities. With that in mind, I’ll leave you with this piece from Stan Rogers…. Have a great weekend.
Russ Lazaruk, RIAC, CIWM, CIM, FCSI
Managing Director & Portfolio Manager
