It was a mixed week on the markets. Equities eked out small gains, bond yields were up (prices down), oil sold off, and the Canadian dollar strengthened. With less than 3 weeks left in the year, investors will be booking any unrealized losses for tax planning before hitting the eggnog.
| Index | Close Dec 4th 2025 | Close Dec 11th 2025 |
| S&P500 | 6,858 | 6,918 |
| TSX60 | 31,478 | 31,661 |
| Canada 10 yr. Bond Yield | 3.26% | 3.43% |
| US 10 yr. Treasury Yield | 4.11% | 4.15% |
| USD/CAD | $1.39577 | $1.37670 |
| Brent Crude | $63.31 | $61.57 |
| Gold | $4,208 | $4,278 |
| Bitcoin | $92,180 | $93,441 |
Source: Trading Economics & Factset
There were no surprises from central banks this week. The Bank of Canada held rates steady, as expected. Better employment and GDP numbers gave the Bank ample reason to pause. Inflation remains within the Bank’s comfort zone.
The US Federal Reserve performed as expected with a 25-bps cut in rates. Two items did stand out though. The decision to cut was not unanimous. 2 of the 9 voting members voted for no change. 1 member wanted a more aggressive 50-bps cut. In the end the Fed balanced off a softening labour market with some underlying inflation pressures. The other item was the decision to initiate purchases of short-term treasuries (bonds) to make sure there is sufficient liquidity in the banking system. This pre-emptive move is worth paying attention to.
No change is expected from the European Central Bank (ECB) when they meet next week. In comments this week ECB President Christine Lagarde said EU growth was above expectations and inflation under control. The story was repeated in Australia where the RBA also held the line on rates. It would appear the rate cutting is coming to an end. The next question is, will it draw home buyers off the sidelines if they think mortgage rates have bottomed?
China’s exports have surged this year while their imports declined slightly. The result is an expected $1 trillion trade surplus. The surge seems counter-intuitive in a world of Trump tariffs but the rapid diversification into other markets mitigated the Trump effect. Exports to the EU grew by 15% and by 8.2% to countries in Southeast Asia. Also helping was a weak renminbi, which some would argue is artificially low thanks to central bank FX operations. The rise in exports will help China reach its 5% GDP growth target.
The export boom does paper over some cracks in China’s economy. Inflation has ticked up while domestic consumer demand remains stagnant. Economists have long argued that China needs to raise domestic consumption rather than relying solely on exports. A tough thing to do in the face of an aging population and workforce coupled with an over built real estate market.
The Whitehouse released its National Security Strategy this week. The strategy is unlike anything we have seen from the US since the end of World War 2. While a lot of the headlines around it focus on the US’ pullback from Europe, it has serious implications for Canada. The document envisages a world divided into 3 spheres of influence. Asia left for China, Eurasia left for Russia (hence the European angst), and the Americas dominated by the US. Would the strategy survive in a post-Trump world? Don’t count that out if an acolyte succeeds him as President. You can read a more detailed analysis of the strategy from the Brookings Institute here.
Microsoft has pledged to invest $7.5 billion in Canadian tech over the next 2 years. The money will be used to grow MSFT’s AI capacity within Canada. This translates (mostly) to new data centres. The pledge brings the company’s planned AI investment in Canada to $19 billion between 2023 and 2027. In the announcement MSFT also promised to protect Canada’s data sovereignty, i.e. Canadian data stays in Canada. We’ll see how that works in practice, see the previous paragraph.
It is finally happening. Warren Buffet will be stepping down from his roles at Berkshire Hathaway at the end of the year. Greg Abel, who was born and raised in Edmonton, will take over as CEO. There will be other changes in the senior ranks as people retire or move on to new opportunities. But at 95 and with an incredible career behind him, his retirement is well earned.
We’ll close off the week with this piece from Gloria Gaynor, because despite the turmoil and angst…. We will Survive.
Russ Lazaruk, RIAC, CIWM, CIM, FCSI
Managing Director & Portfolio Manager
