Below is a summary of some of the relevant news items from the Capital Markets and the Economy from the past week extracted from RBC Global Insights and FactSet Research.

You can catch up on the past four weeks’ Weekly Update in the link to my Blog.

Read my latest Smart Investor newsletter on my website. The Q3 2025 edition covers Market Review for first half of 2025, the impact of tariffs, and alternative investments. Shiuman's Corner is about classical music as balm.

Markets

Market scorecard as of close on Friday August 22, 2025.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	28,333	1.5%	14.6%
U.S.	S&P 500	6,467	0.3%	10.0%
U.S.	NASDAQ	21,497	-0.6%	11.3%
Europe/Asia	MSCI EAFE	2,729	-0.4%	20.7%

Source: FactSet

• TSX finished higher in Friday afternoon trading, near best levels and new record high. Most sectors higher. TSX closed with a 1.5% weekly gain.
• US equities ended sharply higher Friday, snapping a five-day losing streak, and mostly stronger on the week. Small caps were the big beneficiary of a more dovish Powell speech.
• With the U.S. earnings season now largely complete, results were generally better-than-expected, with the realized earnings growth rate handily surpassing consensus estimates. Notably, the number of earnings estimate upgrades relative to downgrades reached its highest level since late 2021, marking a reversal from earlier cuts prompted by uncertainty over the impact of supply chain disruptions, which to date have proven less severe than initially feared.
• On balance, the earnings outlook remains supportive of equity markets. Consensus estimates for the S&P 500 are pointing to profit growth of around 9% in 2025 and 12% in 2026. Globally, the MSCI All-Country World Index is expected generate earnings growth of 9% in 2025 and 11% in 2026.
• RBC Capital Markets Head of U.S. Equity Strategy Lori Calvasina noted, “we have a long way to go to understanding how the recent changes in trade policy will impact demand and 2026 outlooks.”

Economy

Canada

• Inflation pressures in Canada eased modestly in July, with headline inflation coming in at 1.7% y/y compared to 1.9% in June. The prior removal of the consumer carbon tax drove some of this drop with gasoline prices falling 16.1% y/y. The next CPI report will land just ahead of the BoC’s Sept. 17 policy meeting and could prove decisive as officials weigh whether to lower the policy rate further after holding it steady at 2.75% for three consecutive decisions.
• Following his phone call last week with U.S. President Donald Trump, Prime Minister Carney announced that Ottawa will remove all tariffs on goods covered by CUSMA. And while tariffs on U.S. steel, aluminum and autos will remain in place for now, one White House official described the announcement as a “welcome move.” The U.S. Census Bureau reported 92% of Canadian exports to the U.S. crossed the border duty free in June―up slightly from 91% in May and 89% in April.

U.S.

• The Federal Reserve chairman cited job market concerns as a potential reason to ease monetary policy, sending markets soaring. However, the Fed faces a “challenging situation” as U.S. tariffs are driving up costs, which could be compounded by lower interest rates. Powell, whose term as chair ends next May, received a standing ovation at the bank’s annual symposium in Jackson Hole, seen as support for the embattled governor who is under pressure from President Trump to cut rates drastically.

Further Afield

• Headline July UK inflation surprised to the upside, reaching 3.8% y/y from 3.6% y/y in June. Services inflation, which the central bank closely watches, also surprised to the upside and was modestly above the Bank of England’s (BoE) target.
• Easing trade tensions between the U.S. and China, which removed a major market overhang, supported the upward momentum in Chinese onshore equities last week. In a low-interest-rate environment, we believe investors are increasingly seeking assets that offer higher returns. As a result, capital is shifting into equities from lower-yielding bonds.

Notes About Companies in Model Portfolio

• Toll Brothers, Inc. (TOL) announced results for its third quarter ended July 31, 2025. Net income and earnings per share were $369.6 million and $3.73 per diluted share, compared to net income of $374.6 million and $3.60 per diluted share in FY 2024’s third quarter. Pre-tax income was $499.5 million, compared to $503.6 million in FY 2024’s third quarter.

Feel free to contact me with any questions and/or to discuss investment ideas.

Regards,

Shiuman

 

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