Market Update November 2025
As we move toward the end of the year, markets continue to make progress, although at a slower pace than earlier in 2025. Interest rates and inflation are currently driven by labour market trends in the U.S. and sluggish growth plus tariffs in Canada, which continue to shape investor sentiment in both countries.
How Did the Markets Perform in October?
Interest Rates & Economy
• The Bank of Canada lowered rates by 25 basis points, bringing the policy rate to 2.25%—the second straight cut and fourth this year. The next decision is scheduled for 2025-12-10, and markets currently expect less than a 50% chance of another cut.
• Canada’s economy remains soft, with Q2 GDP down 1.6% and early indications suggesting Q3 followed a similar trend.
• In the U.S., the Federal Reserve also cut rates by 25 basis points to a target range of 3.75%–4.00% following slower labour market data and ongoing inflation pressure.
Equity Markets
• The S&P/TSX gained 1.0% in October. Technology led with a 13.8% increase, while Materials and Real Estate declined.
• The S&P 500 gained 2.3%, driven again by large-cap technology, which rose 6.2%.
• Inflation remains elevated, particularly in food and shelter and continues to impact consumer spending and borrowing decisions.
Portfolio Positioning
Periods of shifting interest rates and inflation often create short-term volatility. While markets have performed well overall this year, we believe it is sensible to take a slightly more conservative stance as we head into year-end.
Over the coming month, we intend to reduce a small portion of equity exposure and increase cash by approximately 1–2%. This allows us to lock in gains from earlier in the year, reduce near-term volatility, and preserve flexibility should attractive opportunities appear in 2026.
Our portfolios remain well-diversified across sectors, geographies, and asset classes. At this stage, no major repositioning is required.
Federal Budget Summary – What Matters Most to You
The federal government announced its latest budget, focused on long-term growth in infrastructure, housing, clean energy, and national security. While federal spending will remain elevated, the deficit is expected to gradually decline over the next five years.
Key points relevant to you:
• No changes to personal or corporate tax rates. Most households and business owners will not see a change in their tax bracket.
• New targeted tax credits for middle-income earners and personal support workers could help offset rising costs for some families.
• Business investment incentives. Companies can now fully expense eligible capital purchases in the year they’re made. This may benefit business owners upgrading equipment, technology, or preparing for succession planning.
• Large spending on housing and infrastructure. This could support long-term growth in real estate and infrastructure-focused investments.
• Defence and clean-energy spending increases. Potential opportunities may emerge in aerospace, cybersecurity, and sustainable infrastructure.
Overall, the budget was largely in line with expectations and does not translate to any material changes that need to be made in your portfolio.
Bottom Line
Our approach remains disciplined, patient, and focused on long-term results. As we build our cash position in preparation for 2026, we will continue to monitor markets closely, analyse the economic data, and remain alert to opportunities where capital can be deployed effectively. Our approach remains disciplined, research-driven, and patient, always focused on delivering long-term results that prioritize stability and capital protection.
If you have any questions or need anything, please remember we are always here for you.
