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Daily market snapshot

Published August 6, 2025
 Woman on couch looking at laptop

Wednesday, 08/06/2025 p.m.

  • Stocks close higher on continued solid corporate earnings – Equity markets rose on Wednesday, with the TSX and Nasdaq reaching record highs. Walt Disney Company and McDonald's posted quarterly earnings this morning that were ahead of estimates.* Consumer discretionary and consumer staples stocks posted the largest gains, while the health care and energy sectors lagged. In international markets, Asia finished mostly higher overnight as India's central bank held its policy rate steady at 5.5%, as expected*. Europe was little changed as retail sales in the euro area grew 3.1% year-over-year in June, above forecasts pointing to a 2.0% rise.* Auto fuel and nonfood products were key drivers, both up more than 4.0% from a year earlier.** The U.S. dollar declined against major international currencies.* In commodity markets, WTI oil extended its recent decline, reaching its lowest price since early June as markets assess the possibility of changes to U.S. sanctions on Russian oil*.
     
  • Bond yields rise on U.S. Treasury auction – Bond yields were up, with the 10-year Government of Canada yield at 3.37% and the 10-year U.S. Treasury yield at 4.23%. The U.S. Treasury auctioned $42 billion of 10-year notes, drawing somewhat weaker demand, with overall bids as a multiple of those accepted, known as the "bid to cover ratio", dipping to 2.35, compared with the year-to-date average of 2.57***. Despite today's rise, the U.S. benchmark yield has fallen from its July peak near 4.50%, especially following last week's nonfarm-jobs report that showed a slowdown in the labour market in recent months. U.S. bond markets have raised expectations for cuts to the fed funds rate to two or three this year and an additional two next year****, above the Fed's own projection for three cuts through 2026.***** Lower interest rates should reduce borrowing costs for consumers and businesses, which would be supportive of the economy and corporate profits, in our view.
     
  • Earnings season outlook improves on solid results – Corporate earnings season is in full swing as Walt Disney Company and McDonald's announced quarterly earnings this morning that exceeded estimates.* Importantly, Walt Disney's revenue was about in line with forecasts, while that of McDonald's beat expectations, providing data points that consumers appear to remain resilient overall despite the cooling labour market. With 80% of S&P 500 companies reporting, 82% have beaten analyst estimates, with an average upside surprise of 7.6%.* As a result, forecasts for earnings growth of S&P 500 companies have been revised higher to 8.8%, from 3.8% at the end of the quarter.* Earnings growth has been led by the communications and technology sectors, while earnings are down, on average, for energy and consumer discretionary companies.* Earnings growth is forecast to slow over the quarters ahead, combining for 10.0% growth for 2025, aided by the first quarter's strong 12.8% rise.* While we believe earnings growth could slow further as tariffs likely weigh on corporate profit margins, earnings should be sufficient to support stock prices over time, in our view.


Brian Therien, CFA 
Investment Strategy

Source: *FactSet **Eurostat ***U.S. Department of Treasury ****CME FedWatch *****U.S. Federal Reserve  

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