Market Recap* – Week of December 15

1. What happened in the markets?

Canadian stocks moved modestly higher over the week, with the TSX finishing slightly above where it started. By Friday, the index reached a record high on heavy trading volume, supported by strength in technology and metal mining shares. Expectations that government stimulus and lower borrowing costs could support corporate earnings helped maintain a constructive tone heading into the weekend.

U.S. stocks ended the week slightly higher. Gains were supported by strength in AI and large technology stocks as investors continued to digest recent inflation and labour market data. Expectations for U.S. interest rates were largely unchanged, which kept overall market moves measured despite day-to-day volatility.

Canadian bond prices were flat over the week. With no meaningful changes in inflation trends or central bank messaging, government and corporate bonds saw little movement. Fixed income markets remained calm and range-bound heading into year end.

Short-term interest rates in Canada were steady. Three-month treasury bills changed very little and remained close to the Bank of Canada’s policy rate. Demand for cash-like investments remained firm as investors prioritized safety and liquidity over the holiday period.

The Canadian dollar was slightly lower against the U.S. dollar over the week. The move reflected modest U.S. dollar strength rather than any shift in domestic fundamentals. With limited surprises in economic data or commodity prices, currency markets remained relatively calm.

2. What does it mean for Embark Funds?

Asset class	Change	Impact on cohorts
Canadian Equities	↑	Modestly positive for younger cohorts with higher domestic equity exposure. Gains were limited but supportive as the TSX finished the week higher overall.
U.S. Equities	↑	Slightly positive for growth-oriented cohorts. U.S. equities edged higher, supporting portfolios with greater exposure to U.S. markets.
Bonds	→	Neutral for older and more conservative cohorts. Bond prices were flat, providing stability but little contribution to returns.
Money Market	→	Neutral. Short-term instruments remained steady, continuing to offer capital preservation.
Canadian Dollar	↓ CAD	Slightly positive for growth-oriented cohorts holding U.S. assets, as a weaker Canadian dollar modestly supported translated returns.