Gold’s Up… But Is Canada’s Economy Slowing Down?
Gold’s Glittering, Shopify’s Soaring… but the Economy’s Snoring?
Canada’s stock market hit another milestone this week as the TSX reached a new all-time high, thanks to strong earnings from key tech names, rising gold prices, and growing optimism that interest rate cuts may be coming soon.
Here’s what you need to know:
1. TSX Hits a New Record
The S&P/TSX Composite Index reached a record high of 30,490.04 on Friday, boosted in part by a major rally in Shopify, which saw its share price rise 15% on the week. This surge followed reports of stronger-than-expected growth in the company’s e-commerce and payments businesses, giving the tech sector a much-needed lift.
Gold prices also climbed, reflecting growing investor demand for safe-haven assets. This helped push up mining and materials stocks, another key driver of the TSX’s gains.
Together, tech and gold helped balance out some weakness in other sectors, giving Canadian markets a solid finish to the week.
2. Economic Data Signals a Slowdown
Beneath the market’s strong performance, economic data is flashing warning signs.
Canada’s services sector PMI (Purchasing Managers’ Index) fell to 46.3, the lowest level in three months. A PMI below 50 typically signals economic contraction, meaning businesses in the service industry (like travel, restaurants, and professional services), are seeing slower demand.
This adds to other signs that the Canadian economy may be cooling, even as stock prices rise.
3. Canadian Dollar Slides
The Canadian dollar (CAD) also dipped last week, hitting $0.716 USD at one point… a reflection of weaker domestic data and investor caution.
It managed a slight recovery by the end of the week, supported by a rebound in oil prices, which tend to support the loonie.
✅ In short:
Markets are still holding up, thanks to rate cut expectations and optimism in sectors like tech and mining.
But the fundamentals are sending a different message:
Business activity is weakening
The labour market is softening
The CAD is losing ground
Right now, investors are betting that central banks will step in beforethe slowdown gets worse.
The most important event coming up is Friday’s unemployment report.
This will reveal how Canada’s job market is holding up and could be a deciding factor for the Bank of Canada’s next interest rate decision.
If job losses continue or unemployment ticks up again, expect rate cut expectations to grow… and possibly more volatility in the market.
Your Finance Coach,
Finance Femster
Know someone who’d find this helpful? Pass it on, or invite them to join my Canadian finance community: 📩 [Subscribe here]