Podcast
How Are We Doing This Year?
Will Simpson and Greg Wise
August 29, 2025
Looking at our numbers so far this year against the benchmarks.
This week was a strong one for Canadian markets. The TSX gained about 0.9%, helped by strength in Financials, Energy, and Materials, while most other sectors were in the red. South of the border, U.S. equities struggled, with the S&P down about 0.8% and the Nasdaq off 0.9% in CAD. Europe stood out on the downside, sliding over 3% in CAD terms, while Japan and EM also finished lower.
The Canadian data release on Friday was a big story this week. Q2 GDP came in at -1.6% annualized, much weaker than the -0.7% that economists had expected. On the surface, that’s not great news for the economy, but markets took it positively as it reinforced the case for rate cuts from the BoC. September odds for a cut moved up to about 55%.
Another key move came from currencies. The Canadian dollar strengthened against most major currencies, which further pushed down returns for Canadian investors in what would have been flat to less negative in local terms.
On the inflation front, we got a reading into the Core PCE index, which excludes food and energy items. It is favored by the Federal Reserve and rose 0.3% from June. From the prior year, the gauge picked up to 2.9%, the most since February. The Fed opened the door for rate cuts, but that opening is going to depend on whether labor weakness continues to look like a bigger risk than rising inflation.
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