Lexicon Financial Group Weekly Update — September 17, 2025
“Selling your winners and holding your losers is like cutting the flowers and watering the weeds”
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 196
Looking Around
Often, we’re asked for our perspective on investment-related concepts from the popular press. So, based on feedback, we’re introducing a wrinkle into the way we produce our weekly updates. Once per month, we’ll dedicate the “Looking Around” section to a longer-form article. This, and all of our articles, can be always be found on our website.
We’ll tackle topics related to market history, philanthropy, estate planning, taxes, and more. And, the best ideas come from readers like you. If you’d like our perspective on something, we want to hear from you!
This month, we talk about walled gardens and structures in the investment industry that can keep you trapped in suboptimal investment products. Enjoy!
Read and Watch
Want deeper insight into topics in your Weekly Update? Then, read and/or right click:
How the Bank of Canada’s rate hold could impact you
6 key ways the Federal Reserve impacts your money
Visualized: How Canada Would Rank in the EU by Five Metrics
PREVIEW BOJ set to keep rates steady, offer cautious optimism on outlook
Looking Back
The S&P/TSX composite index (TSX) gave up some strength last Friday, as investors took a breather after two weeks of record rallies. Optimism over a potential interest-rate cut by the Bank of Canada helped the TSX end the week up 0.84 per cent. Data released last Friday showed that Canada's economy shed 65,500 jobs in August, while the unemployment rate climbed to 7.1 per cent, raising the odds that the Bank of Canada (BoC) will also resume its easing of interest rates (which it did). (1)
Most major stock indexes in the United States (U.S.) finished the week higher due to expectations that the Federal Reserve (Fed) would lower interest rates. The continued artificial intelligence (AI) boom was supported by Oracle’s announcement of several large new AI deals.
Consumer price growth in the U.S. rose to 2.9 per cent year over year in August, according to data released by the Bureau of Labor Statistics (BLS) last Thursday. The agency’s consumer price index (CPI) data showed headline prices rose 2.9 per cent year over year in August, an increase from July’s reading of 2.7 per cent. Core CPI, which excludes food and energy costs, rose 3.1 per cent over the same period.
The BLS also reported that its August producer price index (PPI), a separate measure of inflation that gauges price increases at the wholesale level, unexpectedly decelerated to a 2.6 per cent year-over-year increase versus 3.1 per cent in the prior month.
On a core basis, wholesale price inflation accelerated modestly to 2.8 per cent from 2.7 per cent in July. Despite this, the Fed is expected to cut short-term interest rates at its upcoming meeting, in response to recent data that have indicated a weakening labour market in the U.S. This is supported by University of Michigan’s Index of Consumer Sentiment for September, which showed a decline in overall sentiment from the prior month, dropping to 55.4 from 58.2 in August.
The pan-European STOXX Europe 600 Index and other major European stock indexes also ended higher on the basis of expectations that the Fed is poised to lower interest rates. The European Central Bank (ECB) held its key deposit rate at two per cent, which was as expected. The ECB is now projecting 2.1 per cent inflation in 2025 and 1.7 per cent in 2026 and expects the European economy to expand 1.2 per cent this year, compared with its previous estimate of 0.9 per cent growth.
Japan’s stock markets rose over the week, as they appeared to take in stride the announcement by Prime Minister Shigeru Ishiba that he intends to resign, following sizable losses in two general elections within the space of 12 months. His ruling Liberal Democratic Party will now hold an emergency leadership election on October 4, when investors will likely focus on whether Ishiba’s successor adopts a more expansionary fiscal approach, potentially including cuts to income and consumption taxes. Although there was some speculation that heightened political uncertainty could lead to a delay in further monetary policy tightening by the Bank of Japan (BoJ), many investors continued to hold the view that it could still raise interest rates this year, as the economy and prices develop in line with its forecasts.
After declining last week, Chinese stock markets rose as bullish sentiment among retail investors persisted. Many economists believe that data in the coming months will confirm China’s growth slowdown and lead officials to roll out more stimulus to protect the economy during the current U.S.-sparked trade war.
Economic data showed that deflationary pressures continue to weigh on China’s economy. The producer price index fell 2.9 per cent in August year on year; for the 35th month in a row, the gauge has remained in negative territory but narrowed its decline from July’s 3.5 per cent drop. The consumer price index also turned negative for the first time in three months, falling a larger-than-expected 0.4 per cent in August from a year ago, as food prices dropped. Unlike most Western countries, China is in its third straight year of deflation, and the government continues to struggle to reverse price declines. But weak domestic demand, due to a multi-year housing market downturn, has made it difficult to engineer a long-term rebound in prices. (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.
TSX Takes Profits with Weekly Gains in Evidence, Glen Wilkins, BayStreet.ca, September 12, 2025
Global markets weekly update - ECB holds rates steady, while markets await next Federal Reserve rate cut, T. Rowe Price, September 12, 2025
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