Lexicon Financial Group Weekly Update — October 22, 2025

Oct 24

“That’s a big part of the process: making the right choice from the beginning. Not getting distracted by shiny things.”

— Marti Noxon, an American television and film writer, director, and producer

From the desk of Craig Swistun, CIM, MFA-P, Portfolio Manager, Raymond James Investment Counsel, and Wayne Hendry, Client Relationship Manager, Raymond James Investment Counsel

ISSUE 201

Looking Around

Given that we are often asked for our perspective on investment-related concepts from the traditional and social media, we dedicated the “Looking Around” section to a longer-form article once a month. This month, our article looks at allure of shiny objects in investing and you can read it on our website by clicking the link below:

The Allure of Shiny Objects

If you’d like our perspective on something or an object (shiny or not), we would really appreciate hearing from you!

Read and Watch

Want deeper insight into topics in your Weekly Update? Then, read and/or right click:

Canada, U.S. markets move in opposite directions as gold prices weigh on the TSX

Wall Street rises to finish its best week in two months after bank stocks stabilize

Credit concerns reach European markets as bank stocks slide over 2%

Foreign Investors Boost Japan Stock Buying on Hopes of Takaichi’s Premiership

The U.S. and China Have a Trust Problem

Raymond James Markets & Investing: With major economic data delayed, corporate earnings take center stage - CIO Larry Adam, October 17, 2025

Raymond James Economy & Policy: Real-time indicators support a rate cut in October - Chief Economist Eugenio J. Alemán, October 17, 2025

Looking Back

Last week, Canada's main stock index returned much of its weekly gain, as gold prices fell and investors took profits in high-flying metal mining shares. Although the S&P/TSX composite index ended down 1.2 per cent last Friday, it was up almost one per cent for the week. The materials sector, which includes fertilizer companies and metal mining shares, fell six per cent - its biggest decline since April this year. The price of gold, a traditional hedge against uncertainty, also pulled back from a record high (gold was down 2.2 per cent), as fears of an escalating trade war between the United States (U.S.) and China lessened. Heavily weighted financials fell 0.2 per cent while energy was down 0.3 per cent. The price of oil reclaimed some of its weekly decline, settling at $57.54 a barrel or 0.1 per cent higher. Consumer staples was a bright spot as it rose 1.6 per cent last week.

The interest rate-sensitive real estate sector rose 0.8 per cent as the Canadian 10-year yield touched its lowest level since April 30 at 3.062 per cent. Tiff Macklem, the Bank of Canada (BoC) Governor, indicated last week that the BoC will be putting more emphasis on potential risks when it decides what to do about interest rates later this month, even as it tries to be more forward-looking. (1)

Last week, major U.S. stock indexes rebounded from the sharp sell-off on the previous Friday, which saw the S&P 500 Index register its worst day since April this year. These indexes started on a positive note after representatives from the U.S. and China appeared to step back on some of the prior week’s escalation of trade tensions. Some dovish comments from Federal Reserve officials and several deal announcements in the artificial intelligence (AI) space also provided support. Earnings season, which began last Tuesday, added to positive investor sentiment, with JPMorgan Chase, Citigroup, and Wells Fargo all reporting better-than-expected results for the quarter. Of the about 12 per cent of S&P 500 companies that had reported earnings as of last Friday morning, 86 per cent announced earnings that beat consensus estimates, according to data from FactSet. Last Thursday, stocks gave back some gains after a pair of regional banks disclosed problems with loans involving allegations of fraud. This, following the recent bankruptcies of a subprime auto lender and an auto parts company, seemed to fuel investor concerns about rising risks in the credit market and the broader health of the regional banking industry. It also helped push the CBOE Volatility Index (VIX) — which measures expected stock market volatility over the next 30 days — to its highest level since April.

The Federal Reserve (Fed) Chair Jerome Powell stated last week that the “downside risks to employment” have shifted the balance of risks in the economy. This has led to investors believing that the Fed is likely to remain on the path to easing borrowing costs at its next meeting, despite inflation remaining above target. U.S. Treasuries generated positive returns last week, as yields across most maturities declined, with the benchmark 10-year U.S. Treasury note yield hitting its lowest level since October 2024 on Thursday. Bond prices and yields, as you may know, move in opposite directions. Banking concerns, the ongoing federal government shutdown, and comments from Fed officials also helped drive yields lower during the week.

*Source: Bloomberg, Edward Jones - This chart shows the VIX volatility index and 2-year U.S. Treasury yield over the past six months*

The pan-European STOXX Europe 600 Index ended 0.37 per cent higher last week, thanks to dovish comments from U.S. Fed Chair Jerome Powell and some signs of de-escalation in U.S.-China trade tensions. Major European stock indexes, however, ended the week mixed.

Japan’s stock markets declined last week. The strength of the yen posed a headwind for Japanese exporters, while domestic political uncertainty and U.S.-China trade tensions weighed on investor risk appetite. The yield on the 10-year Japanese government bond fell from 1.69 per cent the previous week to 1.62 per cent on safe-haven demand as well as reduced expectations that the Bank of Japan (BoJ) will raise interest rates in the near term.

Mainland Chinese stock markets fell, as trade tensions with the U.S. intensified. China also reported that factory gate prices fell 2.3 per cent in September year on year - the 36th straight month of declines - though the pace of decline was slower than August’s 2.9 per cent drop. Consumer prices declined 0.3 per cent, which was more than economists’ median forecast. On a more positive note, China’s core consumer price index, which excludes food and energy, rose to a 19-month high of 1.0 per cent. The latest inflation data also showed that deflationary pressure continues to stalk China’s economy, which has been struggling with falling prices since the pandemic ended, along with a prolonged housing market slump that has further weakened consumer demand. (2)

The opinions expressed are those of Craig Swistun and not necessarily those of Raymond James Investment Counsel which is a subsidiary of Raymond James Ltd. Statistics and factual data and other information presented are from sources believed to be reliable, but their accuracy cannot be guaranteed. It is furnished on the basis and understanding that Raymond James is to be under no liability whatsoever in respect thereof. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Raymond James advisors are not tax advisors, and we recommend that clients seek independent advice from a professional advisor on tax-related matters.