September 05th, 2025, Newsletter

Dear Friends,

Tangents: Happy Friday.
September 5, 1885: the world’s first gasoline pump is patented by Sylvanus Bowser in Fort Wayne Indiana.
September 5, 1957: “On the Road” by Jack Kerouac, the defining novel of the Beat Generation, was published. Go to article.
September 5. 2002: Reopening ceremony for the World Financial Center Winter Garden, after extensive repairs following the September 11 terrorist attack.

A new study shows that the brain activity behind decision-making is far more widespread across the organ than first thought. Read More.

Archaeologists determined that the bear had an infected injury and had been held captive for a significant amount of time. Read More.

Scientists have discovered and explored a giant hydrothermal system at the bottom of the Pacific, which could provide a window into the origins of life on Earth. Read More.

Astronomers using the James Webb Space Telescope have discovered a planet-forming disk that almost entirely lacks water, challenging prevailing theories. Read More.

Parental controls coming to ChatGPT 
The move follows allegations that it and other chatbots have contributed to self-harm or suicide among teens.

Stolen 17th-century painting recovered
The work by Italian artist Giuseppe Ghislandi was allegedly stolen by Nazis during World War II.

Civil rights activist Joseph McNeil dies at 83
McNeil was one of four North Carolina college students whose occupation of a racially segregated Woolworth’s lunch counter in 1960 helped spark nonviolent sit-in protests across the South.

Farm Aid festival moves to Minneapolis
And the headliners for the 40th annual music and food event have been announced. CNN will broadcast Farm Aid 40 on September 20 from Huntington Bank Stadium in Minneapolis.

PHOTOS OF THE DAY

Cologne, Germany
People attend Gamescom, the world’s largest annual video-game trade fair
Photograph: Anadolu/Getty Images

Come on in, the water’s lovely … a woman considers a swim with a sea lion in the La Jolla neighbourhood of San Diego, California, US
Photograph: Mike Blake/Reuters

​​​​​​​Pigs looking for food descend upon the coves in the Dilek Peninsula Büyük Menderes Delta national park, Turkey
Photograph: Anadolu/Getty Images
 Market Closes for September 5^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Big wheels keep on turning. -John Fogerty, b.1945.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the eighth day, climbing 0.5%, or 134.74 to 29,050.63 in Toronto.
Celestica Inc. contributed the most to the index gain and had the largest move, increasing 9.9%.
Today, 135 of 210 shares rose, while 73 fell; 7 of 11 sectors were higher, led by materials stocks.

Insights
* This year, the index rose 17%, heading for the best year since 2024
* This quarter, the index rose 8.2%
* So far this week, the index rose 1.7%
* The index advanced 26% in the past 52 weeks. The MSCI AC Americas Index gained 19% in the same period
* The S&P/TSX Composite is at its 52-week high and 30.7% above its low on April 7, 2025
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.5 on a trailing basis and 18.1 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.5% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.63t
* 30-day price volatility fell to 9.83% compared with 9.85% in the previous session and the average of 9.79% over the past month

Index Points
Materials | 110.3727| 2.6| 41/6
Information Technology | 50.0344| 1.7| 8/2
Consumer Staples | 12.5529| 1.2| 7/3
Communication Services | 6.3341| 1.0| 4/1
Consumer Discretionary | 5.2241| 0.6| 8/1
Real Estate | 4.4380| 0.9| 17/1
Health Care | 1.2863| 1.8| 3/0
Utilities | -0.3171| 0.0| 8/5
Industrials | -10.7077| -0.3| 16/13
Financials | -18.6504| -0.2| 11/13
Energy | -25.8145| -0.6| 12/28
Celestica | 24.4100| 9.9| 53.3| 153.5
Shopify | 21.8200| 1.3| 12.4| 32.9
Barrick Mining | 20.5800| 4.5| 12.0| 76.6
CIBC | -6.5790| -0.9| 24.9| 19.2
RBC | -14.8500| -0.7| -12.8| 15.5
Canadian Natural Resources | -19.5000| -3.1| 73.4| -5.2
(MT Newswires)
The Toronto Stock Exchange on Friday posted its tenth record close in 11 sessions, today moving on weaker than expected August jobs data that now makes it likely that interest rates will be cut at least once before the end of the year, starting this month, even as National Bank seeks “more clarity” on trade relations with the United States ahead of an expected federal government budget update in October.
Despite mixed commodity prices, the resources heavy S&P/TSX Composite Index was up 134.74 points, or 0.5%, at 29,050.63.
To put recent gains in perspective, the first record close for the index over this 11-day period, on August 21, was 28,055,43.
The first record close last month was 27,570.88 on August 5.
Sectors were mixed, with Energy and the Battery Metals Index both down about 1.7%, while Info Tech was up 2.4%, Health Care up 1.8% and Base Metals up 1.6%.
Within Info Tech, Celestica (CLS.TO) shares rose 10% as BNN Bloomberg cited news of a contract with Bank of Montreal.
There was an Indeed, com report that said BMO Capital Markets had predicted the electronic component manufacturer will be “the key supplier for OpenAI’s custom XPU-based servers/racks.”
Of commodities, gold traded higher late afternoon on Friday, rising as the dollar and yields moved sharply lower after U.S. hiring stalled in July, firming expectations the Federal Reserve will move to lower interest rates beginning this month.
Gold for December delivery was up $34.90 to US$3,641.60 per ounce.
But the West Texas Intermediate oil price fell for a third straight session, dropping to a three-month low on signs of slowing demand and weak US economic data, while reports suggest OPEC+ may raise production to defend market share.
WTI oil for October delivery closed down $1.61 to settle at $61.87 per barrel, the lowest since May 30, while November Brent oil was last seen down $1.48 to $65.51.
On the economics front, Rosenberg Research noted Canadian employment plunged by 65,500 in August, sharply below the already weak consensus call for a +5.0k reading.
This follows the 40.8k drop in July and brings the six-month cumulative change in employment to minus 40k, the steepest downturn since August 2020.
The unemployment rate ticked up to 7.1% from 6.9% in July, even with the participation rate dipping to 65.1% from 65.2% in July.
If not for that, the jobless rate would have risen to 7.2%.
The research also noted wages showed “mixed signals”, the average wage rate increased by 3.2% year over year, but it said this should really be of little concern to the Bank of Canada (BoC) because the widening labor market slack will ensure that cost pressures will remain contained.
Of concern to Rosenberg Research, Governor Tiff Macklem and the BoC have hesitated to move on rates this year, citing tariff uncertainty.
“Yet,” it said, “uncertainty itself has become a significant headwind for growth without meaningfully affecting inflation expectations and is showing through in a sharp reduction in hiring activity.”
According to Rosenberg, today’s employment report should dispel any lingering doubts as to what the BoC should be doing at the coming policy meeting on September 17.
Indeed, it noted, in the immediate aftermath of the data, rate-cutting odds have climbed to 74% from 65% pre-release.
Ten-year yields fell to 3.27%, down more than 7 basis points, while the Loonie was little changed.
“But the fact that export-sensitive manufacturing (-19k) and transportation (-23k) were some of the weakest links from a sector perspective tells you that the Canadian dollar should be trading down on this piece of data.”
Rosenberg noted three items: over the past year, the level of unemployment has risen nearly 8.0%, but the comparable pace of job creation is but a fraction of that at 1.0%; just 65% of the folks who entered the labor market over the past 12 months have managed to land a job; and the unemployment rate has now risen 230 basis points above the cycle-low of 4.8% posted back in July 2022.
“Never before in the annals of recorded Canadian economic history has the economy managed to escape an official recession with such a dramatic move off the cycle low,” the research said, before adding: “Tiff, you know what to do.”
Elsewhere, Derek Holt, Head of Capital Markets Economics at Scotiabank, said a combination of factors, including falling inflation, growth risks in the United States, tariffs, and uncertainty around the Canadian federal government’s budget in October, probably merits additional easing by the BoC, but he added it is not without risks to how the BoC may look at things.
“One cut wouldn’t be worth Macklem getting out of bed to deliver as the effects would be scant and markets would pressure him to keep going. 50bps back to back and then we’ll see,” Holt added.
“All of which would be a pivot away from inflation risk, for now”, Holt said, before adding: “The interest sensitives are showing responsiveness to prior easing; witness Q2 consumption growth and final domestic demand plus some housing momentum.
Trend core inflation remains too warm in m/m SAAR terms, but we’ll see the next batch of readings the week after next.
Arguments for persistent cost pressures remain sound, such as supply chain turmoil, higher inventory holdings as a buffer, labour market wage and productivity pressures.
Easing as an insurance play now could well motivate regrets later, and with that some take back.”
Meanwhile, BMO Capital Markets’ chief economist Douglas Porter in his weekly ‘Talking Points’ note said BMO Economics is now looking for the BoC to cut rates in September, and it is sticking to it dovish lean that it will ultimately slice by 75 bps, taking the rate to 2.0% by early next year.
“While we and the market have been debating the timing and depth of potential cuts, an exceptionally weak Canadian jobs report barged into the discussion and left few doubts,” he added, noting that while many were pointing to the somewhat hawkish language in the July meeting and minutes, that event pre-dated the loss of more than 100,000 jobs and the removal of most of Canada’s reciprocal tariffs.
Macquarie Bank has pulled forward the timing for its first expected BoC rate cut to September and its second cut to October, previously December.
While this is its base case, uncertainty remains on the timing with the August CPI reading (due on Sept 16) being an important consideration for the BoC.
Beyond jobs and rates, National Bank still has its focus on trade uncertainty.
From the get-go of this year’s trade war, said National Bank’s Ethan Currie, it was clear that for Canada, USMCA was the “name of the tariff game”.
Currie noted carve outs awarded to traded goods registered under the agreement have proven to be the largest source of Canada’s “relatively favourable” tariff outlook.
Without such shelter, Currie said, the effective duty rate on U.S.-bound Canadian exports would reflect more egregious ‘headline’ figures imposed via the IEEPA (International Emergency Economic Powers Act).  For example, the 35% levy justified by border security concerns.
Instead, he added Canada is currently exposed to an average tariff rate of about 5% by National’s estimates, “a figure that is predominantly propped up by sector-specific levies (which has key regional implications that shouldn’t be neglected).”
Globally, Currie noted, the USMCA advantage is clear, with recently released U.S. customs data for July suggesting the effective tariff rate paid on imports from Canada was 3.0% (Mexico 4.7%), both well below the all-partner, trade-weighted average of near 10%.
Currie cited a chart showing USMCA compliance in Canada-U.S. trade reached a record high in July.
At 84%, this registration rate also saw the largest monthly (and yearly) jump on record, even after an initial surge in March.
Currie said: “Now consistent with the relatively muted tariff rate implied by customs data, a near-potential compliance rate continues to flag the importance of trade negotiations.
To us, it is imperative that more clarity on the USMCA renewal be soon provided to maximize the efficiency of fiscal deployment (to be previewed in the fall budget).”
US
By Rita Nazareth
(Bloomberg) — Strong evidence the US labor market is slowing rippled through Wall Street, driving stocks lower and bonds higher on concern the Federal Reserve will now have to rush to prevent further weakness.
The sharp cooling triggered fears about a more pronounced jobs slowdown, sparking a flight to Treasuries, with two-year yields hovering near the lowest since 2022.
The data also prompted a fast repricing in money markets, which now project almost three Fed cuts this year.
Those prospects were not enough to sustain gains in the S&P 500.
After hitting record highs, the gauge lost steam amid worries the Fed is behind the curve on preventing jobs weakening at a time when inflation continues to show signs of stickiness.
To Bret Kenwell at eToro, investors should tread carefully.
There’s a clear difference between a temporary cooling in the jobs market and a deeper downturn.
“Hoping for the former while ignoring the risks of the latter – just to usher in lower rates – is a slippery slope,” Kenwell said.
“Stocks have held up well amid high rates and a resilient economy, but that resilience could quickly fade if the labor market shows real cracks.”
Job growth has moderated materially in recent months and openings have declined, weighing on broader economic activity.
Nonfarm payrolls increased 22,000 in August, and revisions showed employment shrank in June for the first time since 2020.
The jobless rate ticked up to 4.3%.
“Today’s news probably raises more questions about the growth outlook than about the Fed outlook,” said Michael Feroli at JPMorgan Chase & Co., adding the data should remove the “last major hurdle” for the Fed to cut rates by 25 basis points this month.
“We also think today’s numbers buttress the case for sequential, rather than staggered, rate cuts after September,” Feroli added.
“Bad news for employment is good news for investors wanting lower rates,” said David Russell at TradeStation.
“A September cut is a near certainty and October is increasingly in play.
The punch bowl could be ready to go as job growth grinds to a halt.”
While today’s report is not yet inviting renewed concerns around recession, worries about the health of the economy are starting to creep in, said Seema Shah at Principal Asset Management.
“A further deterioration in the health of the labor market would soon tip the balance to ‘bad news is simply bad news’,” she noted.
“Equally a strong inflation print next week could strike new fears about a ‘stagflationary mix.’
The market is treading a very, very narrow path to continued gains.”
As the Fed prepares for its upcoming meeting, policymakers will likely focus on the weakness in the job market to defend their decision to cut rates, according to Jeff Roach at LPL Financial.
Economists at Bank of America Corp. now forecast two Fed cuts this year — in September and December — scrapping what had become an outlier call for no action until next year.
At Barclays Plc, economists said they now see three rate cuts in 2025 — one at each of the Fed’s remaining meetings — compared to the two reductions they previously expected.
To Tiffany Wilding at Pacific Investment Management Co., today’s data, along with other economic indicators, give the Fed room to begin cutting rates starting this month.
“We are not forecasting a recession and still expect a relatively gradual return to neutral as inflation normalizes,” she noted.
“That said, the accumulating evidence of labor-market weakness warrants a somewhat faster pace of easing than we had previously projected.”
Even prior to the latest jobs report, a substantial slowdown in payroll growth over the summer had prompted comments from Fed Chair Jerome Powell and other policymakers that the balance of risks was shifting away from inflation and toward unemployment.
“Concerns about a weakening employment picture will dominate any lingering apprehensions around a de-anchoring of inflation expectations,” said Oscar Munoz and Gennadiy Goldberg at TD Securities, who expect three straight rate cuts starting this month.
“We remain buyers of rates on dips even as the move could prove a grind as markets are already penciling in a terminal rate below 3%,” they said.
To Krishna Guha at Evercore, the jobs data locks a 25 basis-point cut this month and will influence the way the Fed frames out the playbook post-September.
“The market has moved quickly to price an October cut as overwhelmingly likely following the report,” he said.
“We do not think October is close to a lock, and believe it will be genuinely data-dependent.”
On Tuesday, the Bureau of Labor Statistics will release its preliminary benchmark revision, an adjustment that could shave hundreds of thousands from reported payrolls in the year through March.
Fed Governor Christopher Waller recently estimated that monthly job creation will be reduced by an average of about 60,000 a month.
‘I’m Still Undecided’
Meantime, Fed Bank of Chicago President Austan Goolsbee said he’s still undecided on what course of action he will support at September meeting, pointing to inflation data due next week.
“I want to get more information. I’m still undecided as we’re going into this,” Goolsbee told Bloomberg Television.
“We’ve got to look at the inflation side too.”
Investors could prove somewhat cautious ahead of Thursday’s consumer price index, which could pour some cold water on expectations of rapid cuts if services inflation remains firmer than expected, according to TD Securities strategists.
Ian Lyngen at BMO Capital Markets says he’s worried about the risk of a repeat of July’s composition – soft goods inflation with sticky services pressure.
“If there is a broadening out of service sector reflation, one would be remiss not to assume it would have a limited impact on the extent to which the Committee will be willing to signal future rate cuts,” he noted.
At Glenmede, Jason Pride notes that while Friday’s jobs report is the “cherry on top of the argument for a rate cut” in September, beyond that, the odds of a one-and-done cut are falling.
“If the data continue to follow recent trends, the Fed may be heading toward a path that sees them cut rates at each of its meetings through year-end,” he said.
Weaker jobs data will increase the odds of a Fed cut, but could create shorter-term volatility, as a cooling labor market is not a sign of strength, said Larry Tentarelli at Blue Chip Daily Trend Report.
Investor Dilemma
There is clearly a dilemma in investors’ minds right now, which is why stocks initially rallied and then dropped, according to Fawad Razaqzada at City Index and Forex.com.
A weakening jobs market indicates the economy is cooling, which could ultimately be “bad news” for company profits, he said.
But this is countered by argument that lower rates should soften the blow and provide a positive backdrop for stocks.
“All told, today’s weaker jobs report should not significantly reduce the appetite for risk taking,” Razaqzada noted.
“Ultimately, the trend is bullish for markets and dip- buyers will use any excuse to buy any dips they can get their hands on.”
In fact, equities closed off session lows on Friday, and most shares in the S&P 500 actually gained.
Mark Hackett at Nationwide anticipates near-term volatility amid softer payroll data, seasonal factors, lofty expectations, and signs of fatigue within large-cap technology.
“That said, we see several important tailwinds building momentum,” Hackett notes.
“These include fiscal support from the recent budget deal, a near-term ‘sugar rush’ from trade-related purchase agreements, a weaker dollar, improving earnings expectations, and a more dovish Federal Reserve.”
Over the next six to 12 months, Hackett says these supports should cascade through the market and could be amplified by retail investors who remain confident in buying dips.
“While valuations are often cited as a concern, history shows they are a poor market-timing tool,” Hackett said.
“Outside of high-profile technology names, valuations are broadly reasonable — particularly if earnings continue to trend higher.”

Corporate Highlights:
* President Donald Trump said he would be imposing tariffs on semiconductor imports “very shortly,” but spare goods from companies that have pledged to boost their US investments.
* Nvidia Corp. shares fell on Friday, with the chipmaker at risk of losing its historic $4 trillion valuation on news. Broadcom Inc. is helping OpenAI design and produce an artificial intelligence accelerator from 2026.
* President Trump threatened a probe that could prompt fresh tariffs in response to the European Union fining Alphabet Inc.’s Google over findings the company abused its dominance by giving its own ad exchanges a competitive advantage.
* Tesla Inc. proposed a new compensation agreement for Chief Executive Officer Elon Musk potentially worth around $1 trillion, a massive package without precedent in corporate America.
* Apple Inc.’s annual sales in India hit a record of nearly $9 billion in the last fiscal year, signaling growing consumer demand for its flagship devices as the company ramps up its retail footprint in the world’s most populous country.
** Apple’s biggest product launch event of the year takes place on Tuesday, Sept. 9, when the company will introduce its next- generation iPhone lineup, new smartwatches and other peripherals.
* Lululemon Athletica Inc. slashed its outlook, disappointing investors for a third straight quarter as it struggles to meet high expectations and balance tariff expenses in a difficult consumer environment.
* Shares of Eli Lilly & Co. and Novo Nordisk A/S fell after US regulators established a “green list” of foreign manufacturers who produce raw materials that compounding pharmacies use to make copies of their blockbuster GLP-1 drugs.
* Roblox Corp. is testing a short-form video app similar to TikTok that will allow users to capture and share 30-second clips of their video-game play.
* BMW AG unveiled the first of a new range of electric vehicles meant to help the German carmaker push back against Chinese rivals and take back the lead in automotive engineering.
* BBVA SA is finally submitting its takeover bid for Banco Sabadell SA to the target’s shareholders, ushering in the final leg of a deal that could create a huge new Spanish bank.
* Orsted A/S shareholders voted to support a crucial 60 billion Danish kroner ($9.4 billion) rights offering, just after the company issued a fresh profit warning on Friday.
* Nvidia Corp.’s major server production partner Hon Hai Precision Industry Co. reported solid monthly sales growth, signaling demand for AI infrastructure remains intact in the US.

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.3% as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average fell 0.5%
* The MSCI World Index was little changed
* Bloomberg Magnificent 7 Total Return Index fell 0.3%
* The Russell 2000 Index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.6% to $1.1718
* The British pound rose 0.5% to $1.3504
* The Japanese yen rose 0.7% to 147.45 per dollar
Cryptocurrencies
* Bitcoin rose 1.1% to $111,570.39
* Ether rose 0.6% to $4,330.83
Bonds
* The yield on 10-year Treasuries declined seven basis points to 4.09%
* Germany’s 10-year yield declined six basis points to 2.66%
* Britain’s 10-year yield declined seven basis points to 4.65%
* The yield on 2-year Treasuries declined six basis points to 3.52%
* The yield on 30-year Treasuries declined nine basis points to 4.77%
Commodities
* West Texas Intermediate crude fell 2.3% to $62.05 a barrel
* Spot gold rose 1.4% to $3,593.89 an ounce

Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
If it were not for hopes, the heart would break. –Thomas Fuller, 1608-1661.

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Senior Investment Advisor

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
(C): 250.881.0801 (Text Only)
Toll Free: 1.877.430.5895
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www.carolannsteinhoff.com