Kyle Prevost, editor of Million Dollar Journey and founder of the Canadian Financial Summit, summarizes the week’s financial headlines and provides context for Canadian investors.
Inflation still elevated — prices 6.9% higher year over year
Statistics Canada reported this week that consumer prices are rising at the same pace as last month. That means inflation isn’t getting worse month-to-month, but it remains stubbornly high. Many components of the consumer price index (CPI) are up more than 5% compared with a year ago, which keeps inflationary pressures broad and persistent across the economy.
The markets treated the data as largely expected. Canada’s TSX 60 index was essentially flat following the release, reflecting a market that feels steady but cautious. After recent U.S. inflation data moved investors, Canadian markets appear to be in a holding pattern while traders weigh the odds of further Bank of Canada rate moves. Current market pricing suggests a roughly even chance between a 0.25% and a 0.50% policy rate increase at the next decision.
Teachers hit by crypto fraud at FTX
Another week, another high-profile collapse in the cryptocurrency industry. The implosion of FTX and related entities exposed widespread fraud and misuse of customer assets, and the fallout has reached institutional investors as well as individual account holders.
The short version: Sam Bankman-Fried’s FTX empire faced a severe liquidity crisis after competitors raised questions about its solvency. A large wave of withdraw requests revealed that customer funds had been diverted to risky bets and related trading activity, leaving assets unavailable when investors tried to redeem them.
This isn’t just a headline for crypto enthusiasts. Established institutional investors, including the Ontario Teachers’ Pension Plan (OTPP), reported losses after placing capital with FTX. OTPP said it will record roughly a $95 million loss. While the plan emphasized that this represents a tiny fraction of total assets, the human impact — the teaching days and future benefits tied to those dollars — resonates with many contributors and retirees.
The episode highlights several broader points: the dangers of using lightly regulated, offshore trading platforms; the risks of speculative private investments within public pension portfolios; and the need for rigorous oversight and due diligence. For fiduciaries managing pension dollars, this should be a catalyst to re-evaluate allocations to opaque, high-risk ventures and to consider more transparent, low-cost indexed strategies for a large chunk of long-term savings.
Algonquin Power’s earnings spark a sharp sell-off
Canadian utilities are typically slow-moving, defensive investments. Algonquin Power & Utilities Corp. (AQN/TSX) didn’t get that memo this week. The company reported Q3 adjusted earnings per share of CAD$0.11, below expectations, and issued reduced guidance for the full year. Management cited the effects of rising interest rates, planned asset recycling, and a renegotiated, lower-priced acquisition for Kentucky Power.
The market reacted harshly. Shares plunged more than 30% over a short period as investors rushed to reprice the stock against higher interest costs and weaker near-term earnings. Yet beneath the headline move, much of Algonquin’s business remains regulated or contractually protected, and a sizable portion of its debt is held at long-term fixed rates. The dividend also remains in place; while future increases may be paused, the payout looked defensible based on adjusted funds from operations.
Several insiders, including the CEO, bought shares during the sell-off, which signals confidence from management. For long-term income investors, the current yield and the company’s core utility operations — water, natural gas and electricity distribution, plus renewable assets — still make Algonquin worth evaluating. The sell-off appears driven more by panic and leverage dynamics than by a fundamental collapse in the business.
For context, other Canadian utilities delivered steadier results: Fortis reported solid adjusted EPS and saw modest share strength, and Canadian Utilities also reported results that left its stock largely unchanged. Those comparisons help put Algonquin’s volatility in perspective.
Retail earnings: Target under pressure, Walmart and home-improvement chains hold up
As retailers prepare for the holiday season, earnings this week showed a mixed landscape. Walmart and the home-improvement leaders demonstrated resilience against inflationary pressures, while Target disappointed on profitability and flagged cost-control challenges.
- Target (TGT/NYSE): reported earnings per share of $1.54 versus an expected $2.13, and revenue of $26.52 billion, roughly in line with estimates. The profit miss highlights margin pressures and the need for more effective cost management.
- Walmart (WMT/NYSE): reported EPS of $1.50 versus $1.32 expected, and revenue of $152.81 billion versus $147.75 billion forecast, underscoring Walmart’s ability to navigate higher costs and shifting consumer demand.
- Home Depot (HD/NYSE): posted EPS of $4.24, beating the $4.12 expected, with revenue of $38.87 billion, ahead of forecasts.
- Lowe’s (LOW/NYSE): reported EPS of $3.27 versus $3.10 expected and revenue of $23.48 billion, showing steady performance in a challenging environment.
The takeaway for investors is clear: scale, supply-chain flexibility and tight inventory management matter when consumers become more price-sensitive. Companies that control costs and adjust assortments quickly will likely outperform.
Parting note
Kyle Prevost is a financial educator, author and speaker. When he’s not on a basketball court or in a boxing ring, he writes about personal finance and investing at MillionDollarJourney.com and runs the Canadian Financial Summit.