The TSX faces several tailwinds that could drive growth through the third quarter of 2025:

1. Earnings Growth and Profit Margins

• TSX consensus earnings projections for 2025 suggest growth in the range of 9–10%, with profit margins holding firm, supporting healthy market performance.
• Key sectors such as materials, consumer discretionary, and banks have outperformed year-to-date; banks report 10% YTD growth and materials 30.7%.

2. Rate Cuts and Easier Monetary Policy

• The Bank of Canada’s policy of lowering interest rates is expected to bolster borrowing, spending, and investment, underpinning equity returns—especially for interest-rate sensitive sectors like banks and real estate.
• Lower rates also make equities more attractive compared to fixed income, sustaining flows into Canadian stocks.

3. Global and Domestic Stimulus

• New fiscal stimulus from the Canadian government is supporting income and spending, improving growth prospects across consumer-driven sectors.
• Internationally, gold prices have surged (up 25% YTD), driven by global central bank buying (especially China), boosting Canadian gold miners and materials companies.

4. Sector Strength and Leadership

• Materials, consumer discretionary, and banks are leading TSX returns in 2025; consumer discretionary is up 14.8% YTD, highlighting broad-based growth opportunities.
• Major growth companies (Bombardier, Shopify, Gildan Activewear) are benefiting from improved operating results, efficiency initiatives, and global expansion.

5. Investor Sentiment and Capital Flows

• Canadian ETFs set records for net inflows, indicating strong investor confidence and diversification into growth sectors and new products.
• Market valuations remain reasonable (TSX forward P/E at 15.8x, slightly above the 10-year average), which, along with lower equity risk premiums, points to continued buyer interest.

6. AI, Innovation, and Operational Efficiencies

• Investment in AI and digital capabilities is helping Canadian firms boost revenues and margins, particularly in technology and e-commerce, positioning them for growth despite macro uncertainty.

Summary

Put together, anticipated earnings growth, lower rates, fiscal stimulus, sector leadership, strong investor sentiment, and innovation are expected to support continued TSX gains in Q3 2025—even amid global and policy uncertainty.

Several key factors are creating headwinds and uncertainty for the Toronto Stock Exchange (TSX) in the third quarter of 2025:

1. U.S. Tariffs & Trade Uncertainty

• Canadian exports to the U.S. have dropped approximately 14% year-over-year, with businesses facing rising input costs and supply chain disruptions due to new tariffs and trade tensions. This increases costs for import-dependent companies and squeezes profit margins.
• Trade negotiations remain unresolved, casting a shadow on investor sentiment, especially for sectors heavily reliant on exports such as manufacturing and resources.

2. Slowing Economic Growth

• Canada’s economic momentum is waning after a strong start to 2025, with expectations of contraction as exports, housing, and manufacturing slow. The economy is projected to grow about 1.4% in 2025, lower than previous forecasts, and consumer confidence is weak—especially in housing and auto markets.
• Business investment has declined, reflecting persistent uncertainty.

3. Monetary Policy Challenges

• The Bank of Canada faces a difficult choice between supporting growth and containing inflation. While interest rate cuts are expected (twice more in 2025), core inflation remains stubbornly high, complicating policy decisions.
• The BoC’s stance could impact borrowing costs, mortgage rates, and valuations in interest-rate-sensitive sectors.

4. Geopolitical & Market Volatility

• Global uncertainties—such as policy changes in the U.S., trade wars, and fiscal strategies across major economies—are contributing to volatility. For Canada, ongoing macroeconomic and fiscal policy adjustments are causing uncertainty on growth, inflation, and rates.
• While some sectors like financials and resources retain strong fundamentals, overall market sentiment is cautious, with the outlook for TSX returns supported only by reasonable valuations and earnings expectations.

5. Sector-Specific Risks

• The resource sector faces pressure from declining energy prices and demand uncertainty, while the financial sector is sensitive to interest rate movements and regulatory changes.
• Retail and consumer sectors are dealing with weak domestic demand and inventory adjustments.

6. Political Response & Fiscal Policy

• The federal government is responding with increased spending, modest tax cuts, and infrastructure investments—this could provide some support to growth, but may also raise debt levels and long-term fiscal risks.

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Overall, the TSX in Q3 2025 navigates a landscape shaped by trade tensions, economic slowdown, monetary policy complexity, sectoral challenges, and evolving fiscal responses. Investors should expect continued volatility as these issues evolve.

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1. Labor Market – Sign of Weakness

• Job losses continued in July, with Canada shedding 40,800 positions.
• The employment rate fell to 60.7%, the lowest in eight months, while the unemployment rate remained stuck at 6.9%, a multi-year high.
• Youth were hit particularly hard: the unemployment rate for ages 15–24 spiked to 14.6%, the highest (outside pandemic years) since 2010, and their employment rate dropped to 53.6%.
• Job losses were widespread across sectors like information, culture & recreation (−29 000), construction (−22 000), and business services (−19 000), although transportation/warehousing gained over 26,000 jobs.
• Average hourly wages for permanent employees rose 3.5% to C$37.66.
  

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2. Housing Market – Rebound in Sales

• Canadian home sales increased 3.8% month-over-month in July and were up 6.6% year-over-year—marking continued recovery in housing activity.
• However, the Home Price Index (HPI) remained flat from June and still sits 3.4% below July 2024 levels.
• The national average selling price only edged up 0.6% year-over-year.
  

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3. Trade & Agricultural Sector – Canola Crunch

• China imposed provisional anti-dumping duties of 75.8% on Canadian canola imports, significantly disrupting a market valued at nearly C$5 billion in 2024.
• Canola futures dropped over 6%, reflecting immediate market reaction.
  
• In response, the Canadian government is evaluating support measures for canola farmers while pursuing dialogue with China and diversifying trade relationships.
  Reuters

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4. Currency & Market Sentiment

• The Canadian dollar slid to a six-day low, trading at approximately 1.3784 CAD/USD (~72.6 U.S. cents), as market participants lowered expectations for a September Bank of Canada rate cut to about 36%, up from 17% earlier.
• This followed disappointing job data and growing bearish sentiment (short positions hit a year-high of 79,420 contracts).
• Meanwhile, 10-year Canadian bond yields declined to around 3.376%, the lowest since early July.
  

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Summary Table: Canada’s Economic Landscape This Week

Area	Highlight
Labor Market	Significant job losses; rising youth unemployment; stagnant overall unemployment
Housing	Sales rebound; prices still lag behind last year
Agriculture / Trade	Sharp canola tariffs by China; government considering support
Currency & Bonds	Canadian dollar weakened; bond yields fell amid rate cut speculation

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Key Takeaways

• The labor market shows clear strain, raising concerns about economic resilience and possibly prompting policy action.
• Housing activity remains strong, though prices haven’t rebounded—a mixed signal for the broader economy.
• Trade tensions with China, particularly over canola, pose significant risks for the agricultural sector.
• Financial markets are adjusting, with currency and bond markets signaling rising expectations of monetary easing.

Canadian home sales rose 3.8 per cent in July for the fourth consecutive month this year, as house prices remained steady across the nation.

There were 40,228 sales last month after removing seasonal influences, according to the Canadian Real Estate Association (CREA). That is up from 3.8 per cent from 38,737 sales in June.

The increase of sales in July was once again overwhelmingly led by the Greater Toronto Area, where home sale transactions, while still historically low, have rebounded a cumulative 35.5 per cent since March, CREA said.

In July, Ontario saw the largest increase in sales, with 14,464 homes sold on a seasonally adjusted basis, up 7.7 per cent from 13,479 a month prior.

CREA senior economist Shaun Cathcart said the increase in sales over the past four months may be a signal that the long-anticipated pickup in sales following the inflation crisis has “finally arrived.”

“Looking ahead a little bit, it will be interesting to see how buyers react to the burst of new supply that typically shows up in the first half of September,” he said in a release on Friday.

There were 202,500 properties listed for sale at the end of July 2025, up 10.1 per cent from a year earlier, according to CREA. That is in line with the long-term average for that time of the year, the association said in its report.

At the same time, the national average home price (non-seasonally adjusted) was $672,784 in July, just 0.6 per cent higher thana year prior.

Updated Fri, Aug 15 20259:34 AM EDT

S&P 500 and Dow hit record highs, head for big weekly gain after solid retail sales data: Live updates

The S&P 500 and Dow Jones Industrial Average rose to record highs Friday, boosted by retail sales data pointing to a strong consumer, as Wall Street looked to wrap up another week of gains.

The broad market index climbed 0.1%, while the 30-stock Dow advanced 200 points, or 0.4%. Aiding the Dow was a 12% surge in UnitedHealth after Warren Buffett’s Berkshire Hathaway and Michael Burry’s Scion Asset Management revealed they bought stock in the insurance giant during the second quarter. The Nasdaq Composite was flat.

July’s retail sales data, released on Friday morning, painted a still-healthy picture for the U.S. consumer. Retail sales rose 0.5% last month, meeting expectations from the Dow Jones consensus. Retail sales excluding automobiles gained 0.3%, also matching estimates.

For the week, the major averages were headed for solid gains. The Dow, S&P 500 and Nasdaq gained more than 1% week to date as of Thursday’s close, thanks to new consumer inflation data that raised hopes for a Federal Reserve rate cut next month.

Those expectations took a hit on Thursday, however, after a much hotter-than-expected wholesale inflation report. Stocks initially fell during the session but managed to recover most of their losses, with the S&P 500 eking out a fresh record closing high.

“I don’t think that one data point is enough to change a thesis around the trajectory of inflation,” said Tom Lee, head of research at Fundstrat Global Advisors. “Our base case remains that this is going to ultimately be viewed as transitory by the market.”

Intel gained more than 3% following a Bloomberg report that the Trump administration is in discussions to have the U.S. government take a stake.

• The producer price index jumped 0.9% in July, compared with the Dow Jones estimate for a 0.2% gain. It was the biggest monthly increase since June 2022.
• Excluding food and energy prices, the core PPI rose 0.9% against the forecast for 0.3%. Excluding food, energy and trade services, the index was up 0.6%, the biggest gain since March 2022.
• Following the release, market-implied odds of a September cut decreased but only slightly, according to the CME Group’s FedWatch tool.

https://www.cnbc.com/2025/08/14/ppi-inflation-report-july-2025-.html

Crude oil inventories in the U.S. unexpectedly increased by the week ended August 8th, according to a report released by the Energy Information Administration on Wednesday.

The EIA said crude oil inventories rose by 3.0 million last week after falling by 3.0 million barrels in the previous week. Economists had expected crude oil inventories to dip by 0.8 million barrels.

At 426.7 million barrels, U.S. crude oil inventories remain about 6 percent below the five-year average for this time of year, the report said.

The report said distillate fuel inventories, which include heating oil and diesel, also crept up by0.7 million barrels last week but remain about 15 percent below the five-year average for this time of year.

Meanwhile, the EIA said gasoline inventories slipped by 0.8 million barrels last week and are at the five-year average for this time of year.

Metro Inc. reported a third-quarter profit of $323.0-million, up from $296.2-million in the same quarter last year.

The grocery and drugstore retailer says its profit amounted to $1.48 per diluted share for the 16-week period ended July 5, up from $1.31 per diluted share a year ago.

Sales for the quarter rose 3.3 per cent year-over-year to $6.87-billion, up from $6.65-billion in the same quarter last year. The Street had projected $6.92-billion.

Metro chief executive Eric La Flèche says the results were marked by solid comparable sales growth in food and pharmacy, and good cost control.

Food same-store sales were up 1.9 per cent, while pharmacy same-store sales were up 5.5 per cent, with a 6.2-per-cent increase in prescription drugs and a 4.0 per cent increase in front-store sales, primarily driven by over-the-counter products, cosmetics, and health and beauty.

On an adjusted basis, Metro says it earned $1.52 per diluted share in its latest quarter, rising 12.6 per cent year-over-year (from $1.35). That fell a penny short of expectations on the Street.

With files from Reuters

Gildan Activewear has agreed to buy U.S. undergarments maker Hanesbrands for $2.2 billion in cash and stock, the companies said on Wednesday, as the Canadian firm looks to expand its foothold in basic apparel.

Gildan, whose brands include Anvil, Gildan and Gold Toe, will pay about $6 per Hanesbrands share, representing a 24% premium to Monday’s close and implying an equity value of $2.2 billion.

Shares of Hanesbrands fell 2.4% in premarket trading after surging as much as 40% a day earlier, when news of the buyout first emerged.

The deal combines Hanesbrands’ branded retail foothold through its popular brands such as Hanes, Bonds, Maidenform and Playtex with Gildan’s strong wholesale market presence across the United States, Canada, Latin America, Asia-Pacific and Europe.

“The combination of these two large manufacturers… makes sense on paper,” Citigroup analysts said after news of the takeover, adding that Gildan could manage Hanesbrands’ business more efficiently, given its expertise in low-cost manufacturing.

The Financial Times first reported on the potential deal on Tuesday, followed by other media outlets, including Reuters.

The deal caps a turbulent chapter for Hanesbrands that was marked by years of underinvestment, heavy debt and a string of acquisitions that produced mixed results since its spinoff from conglomerate Sara Lee in 2006.

Hanesbrands’ sales have plunged over the last three years amid stiff competition in the athleisure market and cooling demand, but cost-reduction efforts and supply-chain improvements lifted its margins in the past year.

In a move to focus on its core categories, Hanesbrands has steadily offloaded assets, including selling its sportswear brand Champion to Authentic Brands in a $1.2 billion deal last year.

Gildan said it intends to initiate a review of strategic alternatives for Hanesbrands Australia, which could include a sale or other transaction, after the deal closes.

The transaction is expected to close in late 2025 or early 2026 and is likely to be immediately accretive to adjusted profit per share.