U.S and Canadian equity futures are flip flopping this morning and are now pointing to a modest rebound after a volatile week. After several choppy sessions, the S&P 500 and Nasdaq are on pace for their worst week since April (recall the Liberation Day debacle), with the Nasdaq leading losses, down about -3.1% so far this week (at the time of writing). Nvidia’s earnings beat and strong guidance clearly weren’t enough to impress investors yesterday, as markets whipsawed around the company’s results, advancing at first only to fade by the close. The S&P 500 swung from a 1.9% early gain to a -1.6% loss by the end of the day, erasing over $2 trillion in market value in the biggest single day reversal since April. The sudden shift left investors scratching their heads, debating if the cause was over concerns about AI profitability despite strong chipmaker earnings, or renewed anxiety over stretched valuations. Analysts noted that the early gains appeared to be driven by short covering. With Nvidia’s results now out and a December Fed rate cut looking unlikely, investors are questioning what is left to power a year-end rally. The AI jitters were not confined to U.S. markets either, with global chip stocks including ASML and TSMC also declining and weighing on their respective indexes. More broadly, both Asian and European indexes were lower into the end of the week. Adding to the risk-off tone, bitcoin fell below $84,000, while the VIX jumped to 26.
Taking a page out of China’s stimulus playbook plans. Japan approved its largest stimulus package since the pandemic, totaling ¥21.3 trillion. This comes as Prime Minister Sanae Takaichi looks to ease concerns over inflation while also trying not to rock bond markets. The package centers on price relief, such as cutting the gasoline tax, raising the tax-free income threshold, and offering household utility subsidies, and is expected to lower inflation by 0.7%. While the measures may lift GDP by about 1.4% per year over three years, they also require increased bond issuance, adding pressure to Japan’s already precarious fiscal position and contributing to rising yields and a weaker yen. Analysts view the spending as restrained given Takaichi’s minority government, and credit agencies have noted that Japan’s already-weak financial position is unlikely to worsen significantly from this package.
Canadians are tightening their wallets. Canadian retail sales slowed in Q3 as the trade war with the U.S. and slowing population growth weighed on consumer spending. Sales rose just 0.2% from July to September, the weakest pace in over a year, and fell 0.7% in September, with declines in most subsectors, most notably autos, which dropped 2.9% amid tariff uncertainty. The outlook doesn’t look great either, with the BoC expecting household consumption to soften more due to tighter immigration policies and a cooling labour market. Excluding autos, September sales rose 0.2%, helped mainly by food and beverage retailers, while building materials and general merchandise stores saw declines.
Jobs looked solid on the surface in September, but the details tell a mixed story. U.S. job growth exceeded expectations in September with a 119,000 increase in NFP, while the unemployment rate rose to a nearly four-year high of 4.4%. Yesterday’s delayed release of the jobs numbers showed gains concentrated in health care and leisure and hospitality, while manufacturing, transportation, and business services lost jobs. Despite higher private payrolls and participation, wage growth slowed, and continuing jobless claims climbed to the highest level since 2021. Adding to this, major companies across tech, retail, transportation, manufacturing, pharma, and consumer goods have announced more layoffs. Companies have cited rising costs from tariffs, restructuring efforts, shifting consumer demand, and investment in AI. Recent cuts include 13,000 at Verizon, 14,000 at Amazon, 48,000 at UPS, nearly 2,000 at GM, 2,000 at Paramount plus additional international divestiture-related losses, 16,000 at Nestlé, thousands more across Intel, Microsoft, ConocoPhillips, Novo Nordisk, and others.
Speaking of jobs, Canada is pushing Anglo American to make stronger commitments to build a real executive presence in Vancouver as a condition for approving its takeover of Teck Resources. Anglo has already offered to move its global headquarters from London to Vancouver, but Industry Minister Mélanie Joly wants assurances that the shift won’t be merely symbolic and that a meaningful number of senior executives and staff will be based in Canada. Ottawa also wants the merged company, to be called Anglo Teck, to support Canada’s critical minerals strategy given Teck’s prominence in copper, zinc, and other strategic metals. Anglo says it will maintain current employment levels, place a majority of top executives in Canada, and invest at least $4.5 billion over five years. Joly has signalled she wants greater economic benefits and stronger “national champions,” taking lessons from past foreign takeovers where job and production pledges fell short. Shareholders vote on the deal on Dec. 9.
Volodymyr Zelenskiy said he will work with the U.S. on a draft peace plan developed with Russia and expects to discuss it soon with Trump, even though the proposal includes concessions that Ukraine has rejected, including giving up territory and lifting sanctions on Russia. The U.S., which has quietly engaged both sides for weeks, views the 28-point plan as a way to end the war, is urging Ukraine to take the deal. While an end to the war would be great, leaders in Europe have noted that the deal heavily favours Russia. This comes as Zelenskiy faces political pressure amid a major corruption scandal that has implicated close associates and fuel bled calls within his party to remove his chief of staff.
Warren Buffett take notice. A 101-year-old women in Italy is still working as a barista, and has no plans on retiring. Anna Possi has worked at Bar Centrale since opening it with her husband in 1958, continuing to run it alone for the past 51 years. Awarded Italy’s Commander of the Republic for her lifelong service, she has been a fixture of her town for decades. The café continues to be a place where people gather, though Possi has noticed the “younger” crowd tends to focus more on their phones these days. While living working past 100 may not be on everyone’s to-do list, it could be the key to the fountain of youth, with Possi crediting her job for her longevity.
Diversion: Hard Truths
