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.
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Markets
Market scorecard as of close on Friday September 19, 2025.
| Country | Equity Indices | Level | 1 week | YTD |
| Canada | S&P/TSX Composite | 29,768 | 1.7% | 20.4% |
| U.S. | S&P 500 | 6,664 | 1.2% | 13.3% |
| U.S. | NASDAQ | 22,613 | 2.1% | 17.1% |
| Europe/Asia | MSCI EAFE | 2,754 | -0.2% | 21.7% |
Source: FactSet
- TSX finished sharply higher on Friday, near best levels. Most sectors higher. Materials the outsized gainer. Canadian equities end the week up 1.7%, at fresh all-time high.
- US equities ended mostly higher Friday with S&P, Nasdaq, and Dow all hitting record highs. Breadth was negative and equal-weight S&P 500 (RSP) underperformed cap-weighted index by ~70 bp. Big tech was mostly higher. Stocks finished higher for third straight week. Resumption of Fed easing, better economic data (particularly retail sales and initial claims) and a fairly resilient AI trade among the key bullish point.
Economy
Canada
- Canadian headline inflation rose to 1.9% year-over-year in August, slightly lower than our expectations for a 2.1% reading but still up from 1.7% in July. The removal of the carbon tax from energy prices in most provinces in April continued to bias the annual rate lower, but gasoline prices declined at a slower pace, pushing headline inflation higher and making July’s slowdown short-lived.
- The BoC cut its benchmark interest rate by 25 basis points (bps) last week, bringing its policy rate to 2.5%, a level last seen in July 2022. This move brings the overnight rate closer to the lower end of the central bank’s estimated neutral range for interest rates of 2.25%–3.25%. The decision was unanimous among the seven-member Governing Council, given a weaker economy and less upside risk to inflation.
U.S.
- The Federal Reserve’s decision last week to cut the federal funds rate by 25 basis points, its first reduction since December 2024, represents a shift toward a more accommodative stance.
- While the Fed directly controls overnight rates, mortgage rates are more closely tied to longer-term Treasury yields, which often move in anticipation of policy changes. This rate cut could further support the ongoing downward trend in mortgage rates, which have already fallen to 6.3% currently from their 8.0% peak in late 2023.
- Initial unemployment claims fell to 231,000 last week, below consensus of 241,000 and well under the previous week’s 264,000, while continuing claims dropped to 1,920,000 versus expectations of 1,946,000. The significant week-over-week decline has been largely attributed to fraudulent unemployment filings in Texas that artificially inflated previous week’s data, making this improvement more about data normalization than genuine labor market recovery.
Further Afield
- Encouraging signs in the U.S.-China relationship are also helping investor sentiment. Senior U.S. and Chinese trade officials held another round of talks in Spain last week. Reuters reported that officials reached a framework agreement to transfer ownership of TikTok to a U.S. consortium, and this could be confirmed later during a call between President Donald Trump and President Xi Jinping.
- The Bank of England (BoE) delivered a hawkish interest rate hold, with a 7–2 vote split in favour of maintaining policy at 4%, which was in line with the market’s and our expectations. Headline UK CPI inflation remained unchanged at 3.8% y/y in August compared to July.
Feel free to contact me with any questions and/or to discuss investment ideas.
Regards,
Shiuman
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