All the market indices closed higher than the beginning of the month.

• • • The S&P 500 finished at 6,460.26 pts (+1.91%)
    • The DOW finished at 45,544.48 pts (+3.20%)
    • The NASDAQ finished at 21,455.55 pts (+1.58%)
    • The TSX finished at 28,564.45 pts (+4.79%)

Canada

Monetary Policy

• On July 30^th, The Bank of Canada (“BoC”) decided to maintain the overnight lending rate.
  • Currently, the overnight rate is 2.75%, the Bank Rate is at 3.00%, and the deposit rate is at 2.70%.
  • “With still high uncertainty, the Canadian economy showing some resilience, and ongoing pressures on underlying inflation, Governing Council decided to hold the policy interest rate unchanged.”
  • The next interest rate announcement will take place on September 17^th, 2025.

Economic Data

• Canada’s economy lost 40,800 jobs in July, marking the first month of job losses since March 2025 and the largest since January 2022.
• Canada’s economy shrank by 1.6%, annualized, in the second quarter of 2025, bigger than the 0.7% economists had expected.
• Canada’s annual core inflation rate fell to 1.7% in July from 1.9% in the previous month, which was below the 1.8% economists had expected.

U.S.

Monetary Policy

• The Fed announced that there was no change to its federal rate in its June meeting.
  • The target range for the federal funds rate is 4.25-4.50%.

• “Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”
• The next Fed meeting will take place on September 16^th– 17^th.

Economic Data

• The annual inflation rate in the U.S. held steady at 2.7% in July. This came in below the 2.8% rate economists had expected.
  • However, core inflation picked up to 3.1% in July, suggesting that relatively elevated inflationary pressures linger.
• Sales of existing homes in the U.S. increased by 2.0% to 4.01 million in July, which surprised economists who were expecting a 0.3% decline. Existing home sales declined by 2.7% in June.
• Fed Chair Jerome Powell said that tariffs are affecting consumer prices, but the impact may be relatively short-term.
  • On the other hand, he cautioned that there remains a risk that tariffs could have a more lasting effect on inflation.

Global

• The UK economy grew by 0.3% in the second quarter of 2025 which exceeded economists’ expectations.
  • Consumers and business boosted trade activity to get ahead of upcoming tariffs, but trade largely leveled off in the second quarter.
• The People’s Bank of China (PBOC) held its one- and five-year loan prime rates steady at 3.00% and 3.50% respectively.
• Germany has entered a critical minerals partnership with Canada to strengthen trade ties.
  • The agreement supports Germany’s efforts to reduce reliance on China and Russia, while also expanding cooperation between the two countries in energy products.
• Inflation in Japan remains well above the Bank of Japan’s (BoJ) 2% target and is proving sticky at current levels. The BoJ has already raised interest rates, and the data points to a strong likelihood of more rate hikes.

As always if you have any questions, please feel free to reach out to us. Or, if you know someone who would like an opinion on their investments or insurance, please connect us! There is no better compliment than a referral from one of our current clients.

Yours Truly,

The Team, C.R. Smith Financial

Community, Respect, Service & Financial Integrity