November 2025 Market Recap - 2026 is on the way!

Money is a tool. It's something that supports your life!

MERRY CHRISTMAS FROM THE BIDDLE JOHNSTON TEAM (and Maui!)!

We want to take a moment to wish all of our clients a happy holiday season filled with joyful moments with friends, family and loved ones. Thank you for another year of letting us assist you with your wealth journey and we look forward to doing it all again in 2026!

 

Portfolio Management Comment

Here is a 2026 Capital Markets outlook overview from Brett Joyce, CFA. Chief Investment Strategist, BMO Private Wealth

Executive summary

Constructive outlook amid moderating gains

We remain optimistic on global economic and capital market prospects for 2026, supported by solid fundamentals in economic growth, earnings, and monetary and fiscal policy. Our base case anticipates returns across cash, bonds, equities and alternatives broadly in line with long-run averages. We expect moderating equity market performance given the starting point for valuations and exuberant sentiment in certain areas.

 

Economic backdrop: resilient growth

Despite tariff-related disruptions in 2025, global fundamentals held firm – a firmness we expect to carry on into 2026. We see conditions where global growth can surprise to the upside as deferred spending and investment resume. Fiscal stimulus remains a key driver, shifting from household transfers to industrial policies that bolster infrastructure, manufacturing and technology. The U.S. benefits from deregulation, tax cuts and productivity gains, while Europe and Japan see structural improvements and fiscal support.

 

Inflation, monetary and fiscal policy: manageable pressures, supportive conditions

Inflation is expected to stay slightly above central bank targets but within tolerable ranges, aided by soft labour markets and easing trade frictions. Tariff impacts are proving less severe than feared, with price adjustments spread over time. Central banks are positioned to maintain accommodative stances: the Fed is likely to cut rates toward 3.25–3.5% while the Bank of Canada holds near 2.25%. Loose financial conditions, combined with fiscal stimulus, create a favourable backdrop for risk assets.

 

Capital market implications

Cash returns should approximate inflation (2–3%). Canadian fixed income is expected to deliver 3–3.5%, aligned with current yields. Equities remain supported by percentage earnings growth expectations in the mid-teens globally. Valuation compression tempers price appreciation, resulting in high single-digit to low double digit

returns. Alternatives such as private equity, credit, real estate and infrastructure remain useful tools for diversification and return enhancement.

 

Strategic positioning: balanced and diversified

We maintain overweight positions in Canadian and U.S. equities and neutral weight in international and emerging markets. Within fixed income, we favour investment grade corporate bonds and underweight lower-quality high yield bonds.

 

Risks and opportunities

While fundamentals remain supportive, elevated valuations and pockets of exuberance bear watching – particularly in gold stocks and AI-related sectors. We categorize equity opportunities into three themes: downsize (disciplined exposure to overheated segments); right size (maintain positions in sectors priced for continued earnings growth); and upsize (increase exposure to under-owned sectors poised to benefit from global growth).

 

Bottom line

The bull market is “middle-aged,” not overextended. Risks from overvaluation or policy missteps remain low for 2026. Globally, there is a powerful alignment of stimulative monetary and fiscal policy, combined with solid economic and earnings growth that supports further gains, albeit at a moderated pace. Our approach emphasizes diversification across geographies and asset classes, disciplined rebalancing, and prudent risk management to achieve our clients’ long-term financial goals.

 

S&P/TSX price target: 34,000 S&P 500 price target: 7,400

10-year bond yields: Canada = 3.5% 10-year bond yields: U.S. = 4%

Canadian dollar: C$1.35 or US$0.74.

Our Portfolio Management Approach

We are fundamental investors that use technical analysis to manage short-term market risks. We believe that risk management is not a choice, but a necessity. While we cannot control how much downside the market provides during a correction, we can control how much of the downside your account receives. We aim to avoid 60% or more of the decline in any significant downturn. Without our process, there is a good chance you will experience 100% of the downside from the market. We will help you navigate the risks and rewards of the market so that you can stop worrying about your money and start living your life.

 

Transactions

Sold WSP Global: Bought at $213.2115 sold at $265.624. Concerned about the stock move based on AI data center hype.

Sold Dream Reit: Bought at $12.4220 sold at $11.929 - REIT space is not working and put money top work in other areas

Sold Finning: Bought at $37.830 sold at $74.05. had a good run looks toppy.

Sold CQQQ: Bought at $57.6908 sold at $54.780. Allocated the capital into other our other 2 global positions.

Used the cash from these sales to rebalance all the other positions.

Brought up the foreign content to 9.77%.

Returns on our 60/40, 70/30 & 80/20 Portfolios, before fees: 

Interesting Charts

 

Technical Comments

https://www.brookstradingcourse.com/analysis/buyers-below-the-7-bar-emini-bull-microchannel/

Buyers Below the 7-Bar Emini Bull Microchannel

November 30, 2025 By Andrew

Market Overview: S&P 500 E-mini Futures

There were buyers below the 7-Bar Emini bull microchannel on the monthly chart. Bulls need to create a strong breakout above the October 29 high with sustained follow-through buying to resume the trend. Bears will need consecutive bear bars closing near their lows to show they are regaining control.

S&P500 E-mini futures

The Monthly E-mini chart

• The November monthly E-mini candlestick had a small bear body closing in its upper half, with a long tail below.
• Last month, we said traders would watch whether bulls could create additional follow-through buying toward the next round numbers, or if the market would begin to stall and form a minor pullback instead.
• The market formed a pullback, breaking below October’s low, but the move lacked sustained follow-through selling.
• Previously, bulls had a 7-bar bull microchannel, showing persistent buying pressure.
• There are often buyers below the first pullback after such a strong microchannel, and this was the case in November.
• Bulls expect at least a small sideways-to-up leg to retest the trend-extreme high (October 29). This move is underway.
• They want a resumption of the bull trend, with the next targets at the 7,000 and 7,100 levels.
• They need to create a strong breakout above the October 29 high with sustained follow-through buying to resume the trend.
• Bears want a reversal from a large wedge top (July 27, December 6, and October 29) and see the rally as climactic.
• The problem for the bears is the lack of strong bear bars with follow-through selling.
• The long tail below November’s candlestick further indicates the bears are not yet strong.
• They will need consecutive bear bars closing near their lows to show they are regaining control.
• So far, the move up from the April 7 low remains strong, with a tight bull channel and consecutive bull bars closing near their highs.
• The market is Always In Long.
• While the rally appears climactic and overbought, traders will only be willing to sell aggressively once they see bears create strong bear bars with sustained follow-through.
• For now, traders will see whether bulls can create a retest and breakout above the October 29 high with follow-through buying, or if the market will stall around the October 29 area followed by a retest of the November low instead.
• If December closes near its high and at a new all-time high, the yearly candlestick will also close near its high, increasing the odds of at least slightly higher prices in 2026.

Millennial Minute

Ashley here! I want to extend my Merry Christmas wishes to everyone as well! I hope you enjoyed the articles that were shared this year. I also wanted to quickly announce the NEW PODCAST SERIES coming out with yours truly! Stay tuned in early January for the new show "Why Do We Do That?".

Happy Holidays from my family to you all, and we'll see you in 2026!

Planning Article

What Canadian snowbirds need to know before selling their U.S. home

By: Dante Rossi, CPA, CA, CFP® , Jean Richard, LL.B, LL.M, TEP
Wealth Planning and Strategy November 13, 2025

Purchasing a property in Florida or Arizona can be an enticing option for anyone looking to escape the bitter bite of another Canadian winter. But as Canadians face greater scrutiny at the border while dealing with rising insurance rates, as well as higher condo and HOA fees, the U.S. may be losing its appeal for some snowbirds.

Selling a U.S. property as a Canadian tax resident can be a complicated process. It requires navigating two tax systems with different rules, currencies and timelines. Before you make a move, here’s what you need to know to get through the sale smoothly and keep more money in your pocket.

 

How the U.S. taxes your sale

If you’re selling a property in the U.S. for more than you paid for it, you may already be expecting to pay capital gains tax on the difference. But what many Canadians might not know is that there may be a shared tax obligation between the Internal Revenue Service (IRS) and the Canada Revenue Agency (CRA).

While certain exceptions exist, the Foreign Investment in Real Property Tax Act (FIRPTA) in the U.S. requires the buyer to withhold 15% of the gross sale price – not the profit – and remit it to the IRS at closing as an instalment. For instance, if you sell a home for US$1 million, the 15% withholding tax will be US$150,000. This isn’t the final or total tax you may owe; it’s a temporary holdback to make sure the IRS gets paid. Your actual tax bill is calculated later, when you file both your Canadian your U.S. tax returns, to report the capital gain realized.

Think of this withholding tax as a security deposit for the IRS, a portion of which could get returned to you at a later date. In many cases, the amount withheld is higher than your actual tax liability, which means your money could be tied up with the IRS for months.

 

Reducing the withholding tax

The key to reducing the withholding tax is to apply for the right paperwork before you close. According to Dante Rossi, Director of Tax Planning at BMO Private Wealth, Canadians can apply for an IRS Withholding Certificate before closing, which may reduce the withholding tax amount to reflect your expected tax owed (on the capital gain), not the entire sale price.

The catch? The Certificate can take up to three months to process – longer if there are errors or omissions of facts in the application. And at the end of the day, your final tax bill may not be any different with the Certificate than without one, explains Rossi, in which case the financial impact of withholding really comes down to the time value of money.

Jean Richard, Senior Manager and Cross Border and International Tax Consultant at BMO, notes that the gain on the sale of U.S. real property by a non-U.S. person is required to be reported on a U.S. individual non-resident income tax return.

For instance, if you bought a property for US$400,000 and sold it years later for US$1 million then you’d have a US$600,000 capital gain. If that gain was subject to the maximum 20% (federal) tax on capital gains, then your U.S. tax bill could reach US$120,000. That’s $30,000 less than the withholding tax amount outlined earlier on the gross proceeds and, depending on the time of year, you may be waiting months to get that back.

Recovery of the withheld funds depends on when you close. Sales that come late in the year allow you to file your U.S. return early the following year and get your money back faster. But if you sell in January, the money will sit a lot longer, explains Richard.

The work to get reimbursed a portion of the withholding tax starts after the sale. Canadians have to file a U.S. non-resident tax return to report the actual gain, calculate the actual tax owed and claim a refund if too much was withheld.

Many sellers skip this step and lose money they’re entitled to. That’s a mistake, explains Richard. “Many think the withholding is a final tax, but it’s not.”

 

The Canadian side of the sale

Once you’ve dealt with the IRS, there’s still the Canadian side to consider. As a Canadian resident, you’re subject to tax on your worldwide income, which means you must also report the sale on your Canadian tax return, explains Rossi.

When you report the sale to the CRA, you’ll have to do so in Canadian dollars based on the foreign exchange rates when you purchased the property and at the time of the sale transaction, so currency fluctuations can become part of your taxable gain. Returning to the earlier example, if you purchased the property for US$400,000 in 2007, when the Canadian and U.S. dollars were at par, your cost would have been about CAD$400,000. But if you sold it today for US$1 million, current exchange rates would translate that amount to roughly $1.4 million in Canadian dollar terms. From the CRA’s point of view, your capital gain is closer to $1 million, compared to US$600,000 in the eyes of the IRS.

While U.S. federal tax rates top out at 20% for long-term gains, in Canada, half of your capital gain gets added to your taxable income and taxed at your marginal rate. Depending on the province you live in and your tax bracket, your effective tax rate on the gain could exceed 25%.

Fortunately, the foreign tax credit system prevents double taxation. Under this system, the eligible U.S. taxes on the gain can be claimed as a foreign tax credit in Canada for the U.S. tax paid. If the Canadian taxes on the gain are higher than what you’ve paid in the U.S., you’ll essentially owe the difference to the CRA. “In the end, your total payable is the highest amount of both countries, but not both,” Richard says.

 

Selling at a loss

Unfortunately, if you happen to be selling property at a loss, that loss does not provide any tax relief in Canada. That’s because you can’t claim a capital loss on your principal residence or personal use vacation home the way you can with an investment property (meaning you can’t use it to offset other gains or reduce your tax bill).

The challenge, Richard says, is that the U.S. withholding requirement still applies: 15% of the sale price must go to the IRS at closing, even on a loss. Without the IRS Withholding Certificate, on an $800,000 sale, that means $120,000 will be tied up, even though no tax is owing in either country.

“In the case of a sale at a loss, your Withholding Certificate will likely be approved, but they’ll need to see documentation,” Richard says. The challenge, of course, is timing. Obtaining a Withholding Certificate takes roughly three months, which can be “a deal killer” for sellers trying to close quickly, he explains.

 

What you can do now

The best way to minimize your tax bill starts long before you list the property. Richard recommends keeping detailed records of your original purchase price along with any capital improvements you make over time. Renovations, additions and major upgrades can increase your adjusted cost base, which reduces your taxable gain when you eventually sell.

When the property sale day comes, don’t be afraid to ask for help. Rossi recommends Canadians work with cross-border tax advisors who understand both systems and can navigate Withholding Certificates, foreign tax credits and dual-filing requirements. The cost of compliance, which includes filing all of the documents with the IRS, and tax reporting on both sides of the border can be a significant amount and quite complex, which is why it is important to obtain tax advice prior to selling a U.S. property, Rossi says.

And while there’s no way to eliminate your tax obligation, proper planning can reduce what you owe. “It’s a little like debt,” Richard says. “But what you can do is mitigate the amount that will be at stake when you sell.”

 

DISCLAIMER:

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of BMO Nesbitt Burns Inc. (\"BMO NBI\"). Every effort has been made to ensure that the contents have been compiled or derived from sources believed to be reliable and contain information and opinions that are accurate and complete. Information may be available to BMO NBI or its affiliates that is not reflected herein. However, neither the author nor BMO NBI makes any representation or warranty, express or implied, in respect thereof, takes any responsibility for any errors or omissions which may be contained herein or accepts any liability whatsoever for any loss arising from any use of or reliance on this report or its contents. This report is not to be construed as an offer to sell or a solicitation for or an offer to buy any securities. BMO NBI, its affiliates and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities mentioned herein as principal or agent. BMO NBI -will buy from or sell to customers securities of issuers mentioned herein on a principal basis. BMO NBI, its affiliates, officers, directors or employees may have a long or short position in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. BMO NBI or its affiliates may act as financial advisor and/or underwriter for the issuers mentioned herein and may receive remuneration for same. A significant lending relationship may exist between Bank of Montreal, or its affiliates, and certain of the issuers mentioned herein. BMO NBI is a wholly owned subsidiary of Bank of Montreal. Any U.S. person wishing to effect transactions in any security discussed herein should do so through BMO Nesbitt Burns Corp. Member-Canadian Investor Protection Fund.

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