Global Index Performance
Fixed Income*
By the end of November, the North American rate environment had settled into a more stable pattern. The Bank of Canada (BOC) did not have a policy announcement in November, and its policy rate remained on hold at 2.25%. Recent BOC communications have noted that the Canadian economy continues to show resilience, supported by stronger-than-expected GDP growth and steady employment, even as pockets of softness persist in trade-exposed sectors. Inflation is moving closer to target, but global trade uncertainty and uneven growth still warrant caution. In the U.S., the Federal Reserve continued its easing cycle, delivering a 25-basis-point rate cut on December 10 following earlier reductions, citing moderating growth, a cooling labour market, and inflation moving closer to target. The Canadian yield curve modestly steepened as shorter-term rates declined by more than longer-term rates, and credit spreads stayed tight as investors responded to improving sentiment and firmer expectations for stable policy into early 2026.
Equities*
In Canada, the S&P/TSX Composite posted modest gains during the month, supported by financials and industrials, while the energy sector lagged as oil prices moved lower. U.S. equities remained resilient, though performance continued to narrow. Several of the largest S&P 500 constituents, particularly in technology and AI infrastructure, continued to trade at elevated valuation multiples well above long-term averages. Third-quarter earnings releases, which wrapped up in late November, reinforced the divergence: mega-caps generally delivered strong revenue growth and margin stability, while smaller and more cyclical companies faced more muted guidance revisions. International developed markets had mixed performance in November, with some regions like Europe showing gains but still lagging key U.S. benchmarks, and Japan’s performance reflecting currency and export dynamics. Emerging markets were similarly mixed: India saw strong equity fund inflows driven by earnings momentum, while other parts of Asia experienced capital shifts. These trends highlight continued regional dispersion and the importance of selective exposure outside North America.
Broad Market Overview & Outlook
Looking ahead to the remainder of 2025 and into early 2026, we expect slight and gradual easing of financial conditions, moderating inflation, and a more range-bound but constructive equity environment. Key risks include further labour-market cooling, geopolitical disruptions, and the possibility that earlier periods of tight monetary policy continue to weigh on parts of the economy.
For investors, maintaining diversification, emphasizing high-quality fixed income for stability and income, and focusing on disciplined rebalancing remain prudent approaches as markets adjust to a lower-rate, slower-growth environment.
*Data sourced from FactSet as of December 11, 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.