Global Index Performance
Fixed Income*
October saw meaningful developments in interest-rate policy on both sides of the border. The Bank of Canada (BoC) delivered a 25 basis-point (bps) cut to take the overnight target rate to 2.25%, marking a second consecutive cut, and signalled that the easing cycle may be at or near its end unless the outlook deteriorates sharply. The BoC cited both ongoing economic drag—notably trade-driven weakness and soft job growth—and inflation running near target in its decision to cut its policy rate.
In the United States, the Federal Reserve also cut rates by 25 bps on October 29th, lowering the federal funds target range to 3.75-to-4.00%, as it acknowledged moderate economic expansion, a slight rise in unemployment, and inflation that remains above target.
For Canadian investors, lower policy rates translate into reduced short-term borrowing costs, but with growth still soft, returns on high-quality bonds are likely to stay moderate, and managing duration exposure remains important.
Equities*
Equity markets extended their gains through October, supported by resilient corporate earnings and investor optimism around moderating inflation. The S&P/TSX Composite Index performance was boosted by strength in materials and energy, while the S&P 500 advanced roughly 3% despite renewed trade uncertainty. With 64% of S&P 500 companies having reported Q3 results, 83% delivered positive earnings and 79% exceeded revenue expectations. The blended year-over-year earnings growth rate now stands at 10.7%, up from an estimated 7.9% at the start of the quarter, with nine of eleven sectors showing stronger earnings by month end. Valuations remain elevated, with the S&P 500’s 12-month forward P/E ratio at 22.9, above both its 5- and 10-year averages, reflecting optimism but limiting room for multiple expansion. International developed equities also advanced modestly, with the MSCI EAFE Index up 1.9% in October. European growth remained steady and yen strength weighed on Japanese returns, while UK and defensive sectors provided stability. Emerging markets outperformed, gaining roughly 4.2%, driven by renewed Chinese stimulus expectations and continued momentum across Asia’s technology-linked industries.
Broad Market Overview & Outlook
As we enter the final stretch of 2025, markets appear balanced between easing monetary policy and a slowing global economy. Inflation continues to trend toward central bank targets, allowing policymakers to shift focus from tightening to supporting growth. However, uneven economic momentum, elevated equity valuations, and lingering trade frictions suggest a more moderate return environment ahead. For investors, the backdrop favours quality and diversification, maintaining exposure to resilient equities while anchoring portfolios with high-quality fixed income. Opportunities may arise in select sectors benefiting from policy easing or structural growth trends, but discipline remains key.
*Data sourced from FactSet as of November 7, 2025.
1. As measured by the FTSE Canada Bond Universe Index
2. As measured by the S&P/TSX Composite Total Return Index
3. As measured by the S&P 500 Total Return Index in CAD
4. As measured by the MSCI EAFE Total Return Index in CAD
5. As measured by the MSCI EM Total Return Index in CAD
Important Disclosures
Past performance is not indicative of future results. Investment returns will fluctuate and are not guaranteed. Investing involves risk, including the possible loss of principal. Investors should carefully consider their investment objectives and risk tolerance before investing. Index returns shown do not reflect the deduction of management fees, transaction costs, or other expenses, and are not intended to represent the performance of any specific investment. The views and opinions expressed are those of the author and do not constitute investment advice or guarantees of future performance. Market outlooks and forecasts are subject to change without notice.