Market Recap* – Week of October 20

1. What happened in the markets?

Canadian equities posted modest gains over the week, supported early on by firm commodity prices and steady results from major banks. Momentum faded later as gold and oil prices eased, leaving investors cautious following new data showing that inflation ticked higher in September. The increase, driven by smaller declines in gasoline and higher food costs, suggested that price pressures remain persistent. Meanwhile, the Bank of Canada’s latest survey showed that many firms remain hesitant to invest or hire amid trade uncertainty, leading markets to temper expectations for near-term interest rate cuts.

U.S. equities advanced as softer inflation data renewed hopes that the Federal Reserve may begin easing policy in the coming months. Technology and consumer sectors led the gains, while investors turned more selective toward the end of the week, focusing on corporate earnings and upcoming economic reports for further direction.

Canadian bond prices were relatively stable, trading within a narrow range as investors balanced firmer inflation data against signs of slower growth. Early buying provided mild support, but modest profit-taking later in the week left prices little changed. Markets continue to expect rate relief ahead, though the stronger inflation reading may delay the timing.

The Canadian dollar strengthened slightly against the U.S. dollar, supported by a softer greenback and improved risk sentiment. Higher commodity prices early in the week also lent support to the loonie, though trading remained subdued as markets awaited additional economic data and guidance from the Bank of Canada.

2. What does it mean for Embark Funds?

Asset class	Change	Impact on cohorts
Canadian Equities	↑	Slightly positive for younger cohorts with higher equity exposure.
U.S. Equities	↑	Strength in U.S. markets, led by tech and consumer sectors, added to growth for equity-heavy cohorts.
Bonds	Flat (prices)	Stable bond prices helped maintain portfolio balance for older cohorts, with limited gains after inflation data.
Money Market	↑ CAD	Provided steady income for near-maturity cohorts, while a firmer Canadian dollar slightly reduced foreign-asset returns.