Bourstad stock market simulations - Summary of the markets for the week ended on August 1, 2025

Bonds up, stocks down

Bonds and the US dollar were up this week, while stocks and cryptocurrencies were down. Commodities moved without any clear direction. In Canada, gross domestic product fell ‑0.1% in May 2025 after a similar decline in April, due to declines in mining, oil and gas extraction, retail trade, and public administration. S&P Global released its manufacturing PMI index for Canada, which rose modestly from 45.6 to 46.1, remaining below the 50 threshold that separates expansion from recession. According to the National Bank, this is the sixth consecutive month of deteriorating conditions for the sector. In the United States, non-farm payrolls rose by 73,000 in July, below economists' forecasts of more than 100,000. The price index based on personal consumption expenditures rose 0.3% in June to 2.6% on an annual basis for the entire basket, while the basket excluding food and energy rose 0.1% to 2.8%. Elsewhere in the world, the Bank of Japan kept its short-term policy rate at 0.5%. In the same country, core inflation was revised upward to 2.7%, with risks skewed to the upside. In the European Union, the inflation rate for June stood at 2.6%, while the unemployment rate for June reached 5.9%. Over the next week, we will be watching: in Canada, international trade for June (Tuesday), the Ivey PMI (Thursday) and July employment data (Friday); in the United States, international trade for June (Tuesday), wholesale sales for June and consumer credit (Thursday). Elsewhere in the world, retail sales for June for the euro zone; in China, several economic indicators for July will be released, including international trade and the consumer price index.

The six stock markets we follow were down this week. The Shanghai Stock Exchange limited its losses to -0.9%. The Tokyo and Toronto stock exchanges fell by -1.6% and -1.7% respectively. The US stock exchanges fell by -2.2% for the NASDAQ 100 and -2.4% for the New York Stock Exchange; these declines were mainly due to renewed trade tensions between the United States and the rest of the world. The Paris stock market fell the most, down -3.7%, following the negative reception of the agreement reached on Sunday, July 27, between the United States and the European Union.

Yields on 10-year government bonds are down for the four highly rated countries we track. A decline in yields means that bond prices are rising, given the inverse relationship between bond yields and prices. The US bond yield, the main benchmark rate on the market, fell by ‑17 basis points to 4.23% (1 basis point or bps = 0.01%). The Canadian bond yield fell by ‑14 bps, putting the Canadian yield 87 bps below the US yield. The German bond yield fell by -4 bps to 2.68%. The Japanese bond yield fell by -5 bps to 1.55%.

In the commodities market, two of the four commodities we track are up. The commodities most closely followed by the financial press are up: US oil (WTI) is up 3.3% and gold is up 0.8%. Corn is down -2.5%. Copper plummeted by -23.3% after it emerged that copper ore is exempt from US tariffs.

In the cryptocurrency sector, the two cryptos we track are down: Bitcoin is down -3.0% and Ethereum is down -3.9%.

On August 1, it cost 0.8¢ CAD more than on July 25 to buy one US dollar. The euro and the yen are moving in opposite directions against the US dollar, with the single European currency down -1.3% and the Japanese currency up 0.2%.

See the detailed table by following this link:

https://iclf.ca/DL/BTTT_sommaire_marches_250801.pdf

Paul Bourget
Project Director, Bourstad
CIRANO
paul.bourget@cirano.qc.ca

About CIRANO (www.cirano.qc.ca )

The Center for Interuniversity Research and Analysis of Organizations (CIRANO) is a multidisciplinary, liaison and transfer research center, whose mission is to accelerate the transfer of knowledge between the research community and users in industry and public services.

About BOURSTAD (www.bourstad.ca )

The Bourstad program is an activity of the Center for Interuniversity Research and Analysis of Organizations (CIRANO) which receives support from many partners for this financial education project: the Autorité des marchés financiers, its main partner, TD Bank, CFA Montreal , the Canadian Investment Regulatory Organization (CIRO), Finance Montreal, TMX Group, Hyprasoft, Groupe Investissement responsable and QuoteMedia.