November 2025

Optimism surrounding a potential trade deal between the U.S. and China and anticipation of the Fed’s recent rate cut propelled the U.S. stock market through the month, while Fed Chair Powell’s hawkish remarks dampened the run. On November 12, 2025, U.S. President Trump signed a bill ending the longest government shutdown in U.S. history. The 43-day closure of government agencies disrupted the U.S. statistical system, and we anticipate ongoing challenges with obtaining the missing data, creating confusion. In November we maintained our twelve-month forward outlook of three months of Stagnation (U.S. Real GDP growth less than 2.5%) followed by nine months of Recession (negative GDP growth) over the next twelve- month period.

The Consumer Price Index in China increased 0.20% in October of 2025,¹ while China’s surveyed urban unemployment rate fell to 5.1%.² China’s trade surplus came in at USD 90.07 billion in October.³ The Eurozone economy expanded by 0.2% quarter-on-quarter in Q3 2025. On an annual basis, Eurozone GDP rose 1.4%. The figures suggest the bloc continues to show resilience despite geopolitical tensions and trade policy uncertainty.⁴ The Eurozone annual inflation rate held at 2.1% in October 2025.⁵ The Euro Area seasonally adjusted unemployment rate stood at 6.3% in September 2025.⁶

In the U.S., no CPI data collection occurred in October. As much of this work relies on price surveys conducted in the field, it is difficult to reconstruct the data retrospectively. The U.S. unemployment rate increased to 4.4% in September. This will be the last unemployment reading available before the December Fed meeting, as the BLS said Wednesday that October’s jobs report will not include an unemployment rate due to a lack of data collection during the government shutdown.⁷ The U.S. trade deficit narrowed to $59.6 billion in August 2025 from $78.2 billion in July. Among the largest trading partners, the deficit with China widened slightly, the gap with Mexico was little changed, and the one with Vietnam, Taiwan, and the EU declined.⁸ The Canadian GDP rose by 0.6% on quarter in the third quarter of 2025, following a revised 0.5% contraction in the previous period. The expansion was driven by a strengthening trade balance, as imports dropped (-2.2%) and exports edged up (+0.2%). Increased capital investment was driven by government capital spending (+2.9%), supported by a substantial 82.0% rise in expenditures on weapon systems. On an annualized basis, the Canadian GDP grew by 2.6%, rebounding sharply from a revised 1.8% decline in Q2.⁹ The headline inflation rate in Canada fell to 2.2% in October of 2025,¹⁰ while the unemployment rate fell to 6.9%.¹¹

U.S. equities finished October on a strong note, with the S&P 500® up 2.3%, thanks to Big Tech. Smaller caps had a challenging time, with the S&P Mid Cap 400 and S&P SmallCap 600 down 0.5% and 0.89% respectively. The S&P/TSX Composite increased 0.97%. The headline S&P Europe 350 continued its positive streak in October, notching a 2.7% return. The S&P Korea BMI soared 20.7%.

In November we maintained all exposures held in October. We continue to believe that Canada is managing the U.S. tariff uncertainty relatively well, replacing some U.S. exports with contracts in Europe and abroad. Gold is held across all models as a long-term strategic asset, playing a role as an effective hedge against the heightened geopolitical uncertainty and market volatility. Gold has historically been negatively correlated with the dollar. The safe-haven status of gold has been elevated as Trump’s trade agenda and budget deficits shake trust in sovereign debt and currencies, particularly the US dollar. Because bullion is priced in dollars, when the greenback weakens, gold becomes cheaper for holders of other currencies.

The lack of transparency of U.S. economic data resulting from the U.S. government shutdown is cause for caution around the U.S. growth outlook. Though a weaker foreign exchange rate may be good for rebalancing the trade deficit—by making American exports cheaper and more competitive and deterring spending on costlier import, it is not good for household wealth. Our approach to portfolio management is nimble, opportunistic, and deliberate in identifying asset classes that are best placed to generate returns in a new world order. Our focus is on protecting portfolios from downside risk, and we believe that our investment process is working to achieve that goal.

Deborah Frame, President and CIO

Drew Millard, Portfolio Manager

¹ Trading Economics. China CPI. November 9, 2025.

² Trading Economics. China Unemployment. November 14, 2025.

³ Trading Economics. China Trade. November 7, 2025.

⁴ Trading Economics. EU GDP. November 14, 2025.

⁵ Trading Economics. EU Inflation. November 19, 2025.

⁶ Trading Economics. EU Unemployment. November 14, 2025.

⁷ Trading Economics. U.S. Unemployment. November 20, 2025.

⁸ Trading Economics. U.S. Trade. November 19, 2025.

⁹ Trading Economics. Canada GDP. November 28, 2025.

¹⁰ Trading Economics. Canada Inflation. November 17, 2025.

¹¹ Trading Economics. Canada Unemployment. November 7, 2025.

Index return data from Bloomberg and S&P Dow Jones Indices Index Dashboard: U.S., Canada, Europe, Asia, Fixed Income. October 31, 2025. Index performance is based on total returns and expressed in the local currency of the index.