A mixed week on the markets. Bond yields have drifted lower (prices up) on a softening labour market. Meanwhile US equities have clawed their way back up after a sharp early week sell-off. Bitcoin has been drifting lower despite (or because of) new coins being brought to market by the Trump family. The winners this week have been gold and the TSX.
| Index | Close Aug 28th 2025 | Close Sept 4th 2025 |
| S&P500 | 6,506 | 6,501 |
| TSX60 | 28,435 | 28,916 |
| Canada 10 yr. Bond Yield | 3.43% | 3.35% |
| US 10 yr. Treasury Yield | 4.21% | 4.18% |
| USD/CAD | $1.37537 | $1.38273 |
| Brent Crude | $68.21 | $66.86 |
| Gold | $3,416 | $3,550 |
| Bitcoin | $111,970 | $109,909 |
Source: Trading Economics & Factset
Interest rate cuts are becoming increasingly likely. Preliminary labour market data from the US shows a continued weakening of the labour market. The ADP report showed a mere 54,000 jobs added in the US in August, well short of the 75,000 expected or July’s revised 106,000. Jobless claims also rose to by 8,000 to 237,000. Markets are now pricing in a 97.4% chance of a rate cut this month and increasing the odds of another 2 cuts.
In Canada, employment numbers will be released after we publish but expectations are for continuing weakness. Canada’s GDP is anemic, thanks to tariffs and trade flow. Consumer spending is still holding up for now. This puts the chance of another Bank of Canada rate cut on the table, but not a given.
Tariffs are a constant in financial news. This week there were two stories of note. The most salient is the ruling by a US Court of Appeal that most of the tariffs enacted by the US Administration are an illegal use of an emergency powers law. The case will now go to the Supreme Court which has been reluctant to curb the powers of the President. The second story, more relevant to Canada, was a statement from the Prime Minister that there may be some relief on sectoral tariffs. He did hedge the comments, saying there were no guarantees, but it appears progress is being made.
“The enemy of my enemy is my friend” appeared to be the theme of the Shanghai Cooperation Organization’s conflab in Tianjin this week. The summit was choreographed to high light both China as a rising power and the bond between the member states. There were several images that should be sobering to the west; Putin, Modi, & Xi pledging solidarity, Xi joined on the reviewing stand by Putin & Kim Jong Un, and a rapprochement between China and India. The decline of US soft power was on full display.
In corporate news, WestJet has placed an order for 67 new planes from Boeing. The order consists of 60 737-10 Max planes and 7 787-9 Dreamliners. The planes will be delivered between 2029 and 2034. The order is worth US$10 billion at list prices. WestJet also has options on another 40 planes. WestJet made an early strategic decision to stick with one plane manufacturer to reduce complexity and costs in their operations.
Vancouver is blanketed in wildfire smoke again and the moon over Victoria is orange. Fire season is not over, and the outflow winds are carrying smoke from the fires between Hope and Merrit to the coast. We’ll send this week’s musical interlude from Deep Purple out to the fire fighters trying to bring them under control…
Russ Lazaruk, RIAC, CIWM, CIM, FCSI
Managing Director & Portfolio Manager
