Kyle Prevost, editor of Million Dollar Journey and founder of the Canadian Financial Summit, reviews this week’s top stories and explains what they mean for Canadian investors.
Is beating the bank easier than fighting the Fed?
Canada’s central bank — the Bank of Canada (BoC) — operates in a world heavily influenced by the U.S. Federal Reserve. Although Canada controls its own monetary policy, in practice it’s difficult to move too far away from the policy direction set by our larger neighbour.
Last Wednesday the BoC raised its policy rate by 75 basis points to 3.25% — the highest level since 2008 — and said the policy rate will likely need to rise further. That warning came even as Canada reported GDP growth that fell short of analyst expectations.
There had been talk the BoC might move as much as 100 basis points in one go, so the slightly less aggressive hike helped soothe markets. Canadian equities rallied on the announcement as the most extreme rate-hike scenarios appeared unlikely for now.
The Canadian dollar continues to attract negative headlines, largely because it’s being judged against the exceptionally strong U.S. dollar. In absolute terms, the Loonie remains one of the better-performing currencies this year, even if it’s down versus the greenback.
With fixed-income yields rising, many savers and conservative investors are weighing short-term, low-risk options. Our MillionDollarJourney guide to the best short-term investments in Canada can be a helpful starting point for anyone looking to park cash safely.
GameStop’s rollercoaster ride keeps going
The tug-of-war over GameStop (GME) remains a striking example of how retail trading dynamics can overshadow traditional fundamentals. The company reported another quarter of losses, yet the stock jumped about 10% after hours — a reminder that market psychology can sometimes matter more than the numbers.
In the quarter, GameStop reported total revenues of USD 1.14 billion (down from USD 1.18 billion a year earlier), a net loss of USD 108.8 million (versus USD 61.6 million previously), and losses per share of USD 0.36 (up from USD 0.21). Inventory levels are rising as demand softens.
Management’s turnaround plan leans on new revenue streams such as a marketplace for non-fungible tokens (NFTs) and other strategic shifts, but many investors remain skeptical that these moves will return the company to consistent profitability.
The market’s reaction reflects a broader phenomenon: some stocks are now trading on narratives and positioning rather than classic valuation metrics. Analysts had forecast a larger loss per share, and a contingent of buyers treated the company’s shares as a speculative play, valuing the business at several billion dollars despite repeated quarterly losses.
This same meme-stock dynamic intersected with tragedy elsewhere. Bed Bath & Beyond (BBBY) suffered a sudden loss when CFO Gustavo Arnal died by suicide last week; reporting noted that he and investor Ryan Cohen were named in a class-action complaint related to alleged market manipulation. Cohen is also the current chairman of GameStop.
In other earnings news, DocuSign (DOCU) beat estimates slightly with reported EPS of USD 0.44 versus the expected USD 0.42, sending shares higher after hours — though the stock remains well below its year-to-date levels.
Seasonal patterns: is September really scary?
An article from Carson Wealth noted that the S&P 500 was roughly 17% above its June lows, timing that observation with the end of the month. Historically, September has often been a weak month for stocks, and several common explanations are offered for that pattern.
Typical theories for September’s weaker performance include:
- Traders returning from summer break and rebalancing positions, which can create selling pressure.
- Hedge funds and other institutions closing out positions for fiscal-year or tax considerations.
- Self-fulfilling behaviour: because investors expect weakness in September, many sell in advance.
There’s a flip side: late autumn and December often offer attractive buying opportunities ahead of seasonal consumer strength and the so-called “Santa Claus Rally.” Seasonality can guide some decision-making, but it’s also true that long-term reversion and changing market structures mean past patterns don’t guarantee future results.
I tend to rely more on long-term asset allocation and valuation than on calendar-based timing, though keeping seasonality in mind can be one input among many when making investment choices.
Encouraging signs in the U.S. labour market
Charts shared by Liz Ann Sonders highlight two encouraging labour-market trends in the U.S. that counter more pessimistic headlines.
One chart shows solid growth in construction jobs. That sector is important for people without college degrees and can be a key driver of employment for younger workers. The growth in construction employment suggests businesses are still willing to invest in new projects compared with the slow years that followed the financial crisis.
The second chart tracks prime-age (25–54) labour-force participation. Participation rates matter because they show the share of the population working or actively looking for work, not just the share of job seekers among the labour force. Prime-age participation has strengthened, which supports a healthier, more sustainable economy even if headline unemployment fluctuates.
These employment measures are why I remain cautiously optimistic about medium- and long-term prospects in North America. While recessions are possible as the economy slows, the combination of strong job counts, low unemployment, and rising participation makes a sudden, severe depression unlikely.
I prefer to base investment decisions on long-term data and disciplined strategies, rather than reacting to sensational headlines that often overstate short-term risks.
Kyle Prevost is a financial educator, author and speaker. When he’s not on a basketball court or in a boxing ring trying to recapture his youth, he helps Canadians with their personal finances at MillionDollarJourney.com and through the Canadian Financial Summit.