North American markets are pausing after a strong rally through much of 2025, with investors reassessing valuations and watching developments in Washington as the U.S. government shutdown stretches beyond five weeks. Canadian equities have been buoyed by gains in metals and financials, though broader market sentiment has cooled.
BNN Bloomberg spoke with Michael Dehal, senior portfolio manager at Raymond James, who says earnings season has been solid across both sides of the border, but macroeconomic risks — from the U.S. data blackout to a weaker labour market — could test the durability of this year’s gains heading into the final months of 2025.
Key Takeaways
- About 83 per cent of U.S. companies reporting earnings have beaten profit forecasts, but valuations are now under scrutiny.
- The prolonged U.S. government shutdown has delayed key data releases, creating uncertainty for investors and policymakers.
- A Supreme Court decision on Trump-era tariffs could trigger market volatility if refunds are required.
- The TSX has gained from strength in metals and financials, supported by a pro-growth federal budget focused on housing and infrastructure.
- Dehal is monitoring Netflix, Visa and Microsoft, citing strong balance sheets, innovation in AI, and upcoming global events as growth drivers.
Read the full transcript below:
ROGER: Let’s take a look at North American markets. Joining me now is Michael Dehal, senior portfolio manager at Raymond James. Michael, thank you for joining us on a day like this — a lot of red out there.
MICHAEL: Thanks, Roger. It’s been an interesting few days. Investors are taking a bit of a breather. We’ve had such a big run-up in equity markets over the past several months, and now it’s time to reset ahead of a potential year-end rally.
ROGER: Are you concerned, or is this just a pause?
MICHAEL: Overall, earnings season has gone quite well. About 83 per cent of companies reporting have beaten earnings estimates, and nearly 80 per cent have topped revenue forecasts. Earnings are strong, but valuations are the key question now. We’ve had significant multiple expansion, and investors are asking whether profits can justify it. Despite some risks — such as the U.S. government shutdown and a softening labour market in both the U.S. and Canada — I think markets can finish the year on a strong note.
ROGER: What are the biggest risks right now?
MICHAEL: The government shutdown is a major one. We’re around day 38, and this morning the FAA said about 10 per cent of air traffic controllers are affected. If this continues into November or December, it could become a headwind for equities. Another concern is the Supreme Court review of the Trump-era tariffs. If those tariffs are overturned, it could create volatility.
ROGER: Because if they say the tariffs can’t stay in place, that has big implications.
MICHAEL: Exactly. The administration would have to repay more than US$150 billion in tariffs collected so far. That could move markets significantly.
ROGER: With the lack of data during the shutdown, how big a problem is that?
MICHAEL: It’s definitely an issue. We haven’t had official jobs data for a month or two, which makes it harder for the Federal Reserve to gauge the state of the economy. We did get private payroll numbers yesterday — up 42,000 versus expectations of 25,000 — but that doesn’t give the full picture. The longer the shutdown continues, the more the Fed and investors are in the dark.
ROGER: When the data finally comes out, could that cause a sharp market reaction?
MICHAEL: Absolutely. If the data show significant job losses, that could derail the rally and surprise investors on the downside.
ROGER: Turning to Canada, we’ve seen some volatility on the TSX — up one day, down the next — but overall it’s been a good year.
MICHAEL: It has. Roughly 40 per cent of the TSX is tied to base metals and materials, and the run-up in gold and other metals has been a major tailwind. Financials have also performed well, with the banks posting solid results over the past couple of quarters. It’ll be important to see how they do when the next round of earnings arrives in a few weeks. The new federal budget also points to opportunities in infrastructure, construction and engineering.
ROGER: Are you optimistic about that budget and its focus on growth?
MICHAEL: Yes. It’s definitely pro-growth. The government is emphasizing infrastructure, housing — with about $25 billion in new spending — and defence. That’s good to see.
ROGER: Back to earnings — we’ve seen strong numbers overall. How is that shaping up in Canada?
MICHAEL: Earnings season here has been solid. Several companies have met or exceeded expectations. Canadian Tire, for instance, reported strong results earlier today, which explains the stock’s positive reaction.
ROGER: Let’s talk about a few stocks you’re watching, starting with Netflix.
MICHAEL: Netflix continues to lead in streaming. Revenue and earnings are up about 17 per cent year over year. The company’s moving into live content — they’ll stream an NFL game on Christmas Day and several high-profile boxing matches. They’re also releasing new feature films in the fourth quarter. With US$9 billion in free cash flow, Netflix has strong liquidity, and the 10-for-one stock split will make it more accessible to investors.
ROGER: They certainly haven’t stood still.
MICHAEL: Exactly. Their innovation is keeping them ahead.
ROGER: Let’s move to Visa.
MICHAEL: Visa remains a leader in global payments, with solid transaction growth and earnings momentum both in the U.S. and internationally. Tailwinds for 2026 include the World Cup and the Winter Olympics. The company is also working with AI partners like OpenAI and Microsoft to strengthen its digital strategy.
ROGER: We’re out of time, but Microsoft was the other name you liked. Michael, thanks very much for joining us today.
MICHAEL: Thank you, Roger.
ROGER: That was Michael Dehal, senior portfolio manager at Raymond James.
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This BNN Bloomberg summary and transcript of the Nov. 6, 2025 interview with Michael Dehal are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
