Weekly Performance Report

U.S. equities finished higher week-over-week: the Dow gained ~1.6% (~+711 pts), the S&P 500 rose ~1.7%, and the Nasdaq advanced ~2.1%. Futures opened modestly green Sunday evening ahead of a heavy earnings slate. The U.S. government shutdown has reached ~20 days, delaying key economic releases and complicating the market’s read on growth and inflation. September CPI is rescheduled for Friday, Oct 24 at 8:30 a.m. ET; investors expect ~3.1% y/y. Meanwhile, 10-year Treasury yields dipped below 4% intraday last week amid regional-bank jitters before edging back up; oil extended a multi-week slide with Brent near ~$61 and WTI near ~$57, easing headline-inflation pressure. Despite headline risks (shutdown, tariff noise, bank credit worries), the primary uptrend remains intact, with technicians watching S&P 500 support levels closely for correction signals. Although markets have been resilient, even through this prior week, uncertainty within the markets is at an all-time high, as investors are constantly jumping ship from bullish to bearish. One day, it can feel as though the tariffs are going to end the world, and the next, we hit new highs. One exciting thing that no investor seems to be taking seriously is the genuine threat to a recession that is being posed to the economy today. Although tariffs have been at the forefront of people’s minds for months on end, markets are still resilient and reaching all-time highs due to the “taco” trade. Essentially, this means that Trump will back down from the steep tariffs he’s been promising. This issue with this is that the markets are priced for perfection currently, yet there seems to be imperfection in the near future that investors are blind to at the moment. For instance, besides the Trump tariffs, credit delinquencies around the globe have been reaching high levels. Credit delinquencies across the U.S. and Canada are rising, particularly in credit cards, auto loans, and commercial real estate (CRE), signalling early-stage strain in consumer and business credit quality. Subprime borrowers are facing record-high auto repossessions and elevated card charge-offs, while office-linked CRE loans continue to see high delinquency and modification rates. Mortgage performance remains stable overall—especially for prime borrowers—but Canada’s upcoming 2025–2026 renewal wave could pressure households facing higher payments. For banks, these trends mean higher loan-loss provisions, earnings volatility, and tighter lending standards, especially among regional and consumer-exposed lenders. While the risk of a broad banking collapse remains low for now, persistent credit deterioration and funding stress could amplify market volatility, slow growth, and weigh heavily on financial, real estate, and consumer-driven sectors heading into 2026.