The Week in 60 Seconds

Monday felt like a hangover. The NASDAQ 100 had just logged its weakest stretch since June — more than 4% down — the S&P 500 closed 7,659 (−1.1%), and the only adult in the room was the TSX, which ticked up as money hid in utilities and names like Hydro One. Then Statistics Canada crashed the cut-odds party: September inflation printed 3.1%, above the Bank of Canada's 1-to-3% band. By Tuesday the TSX was under 36,000, financials and metal miners led the slide, and “maybe they ease” turned into “maybe they hike.” Midweek we got the bounce — S&P 7,757, NASDAQ 26,703 — because tech still spends like a drunken sailor: Meta’s capex hit $33.9 billion this quarter, up from $18.8 billion a year ago. Then oil and producer prices shoved the TSX back into the 35,700s. Canada’s Raw Materials Price Index jumped 4.8% month-on-month, crude +14.4%. Auto-loan delinquencies hit 2010 highs (one in five Americans behind; a $1.7 trillion market). CIBC sat ~7% below a $170.50 fair-value estimate after pricing $1 billion of long-dated notes. Consumer stress is real, AI capex is not slowing, and Canadian rate-sensitive income just stopped being a free lunch. That arc ran from ▶ Episode 205 · 2026-10-19 through ▶ Episode 211 · 2026-10-25.

The NASDAQ Race Update

We’re behind, and we should say it plainly. The NASDAQ Composite chopped from 26,140 on Monday to 25,955 by the weekend — a 0.7% slip after that ugly open — while four closed practice sims (AMD, AVGO, BB.TO, ATZ.TO) went 1-for-4 and averaged −2.5%. That’s about 180 basis points of negative alpha: the index pulled ahead because we paid up for catalysts that never got volume. The play to close the gap isn’t “buy more tech.” It’s to stop treating partnership rumours as fills and to copy the one pattern that actually paid — an earnings beat, a guidance raise, and follow-through, the ATZ.TO tape.

Practice Investment Scoreboard

Closed simulations reported this week (equal-weight book vs this week’s NASDAQ, −0.7% Monday-to-Friday):

Weekly win rate: 25% (1-for-4) Equal-weight P&L: −2.47% Alpha vs this week’s NASDAQ: about −1.8 points

No excuses. AMD and AVGO were headline trades without the volume check we keep preaching (▶ Episode 207 · 2026-10-21, ▶ Episode 208 · 2026-10-22). BB.TO was a valuation entry into risk-off (▶ Episode 210 · 2026-10-24). ATZ.TO did the job: beat, raise, follow-through (▶ Episode 211 · 2026-10-25). The tape also rewarded real numbers elsewhere — Mullen Group jumped 11.5% on record Q3 — which is the same lesson with a different ticker.

Strategy of the Week

Covered calls on a Canadian equity ETF you already own.

This was the most usable idea in a week full of macro noise (▶ Episode 206 · 2026-10-20). If you do nothing else, do this.

1. What it is. You hold a broad Canadian equity ETF inside a TFSA and sell monthly out-of-the-money calls against it, targeting about 1–2% premium per month — cash flow without selling the shares.
2. When to use it. Sideways or mildly bullish markets with elevated vol. That’s this tape: BoC uncertainty, a chopping NASDAQ, and you still want income from banks and utilities you refuse to dump.
3. How to set it up.
   - Wealthsimple: Buy XIU or VCN in the TFSA. If that account can’t sell covered calls, keep the stock leg there and write the option at Questrade or IBKR. - Questrade: Enable options, buy 100-share lots, pull the ~30-day chain, sell calls ~3–5% out of the money (one contract per 100 shares). - IBKR: Same structure; target delta around 0.25–0.30 and never overwrite more than you’re willing to have called away.

Main risk: the market rips and shares get called. That’s opportunity cost, not a blow-up. Pair it with monthly-pay iShares distributions if you want a second income layer. BlackRock Canada’s October iShares payouts are the reminder that the overlay works best as a complement, not a substitute for owning the thing.

What to Watch Next Week

1. Bank of Canada rate decision — Wednesday, October 28, 10:00 AM ET. After 3.1% CPI, markets have been pricing a hold or even a hike. A clean hold should bid TSX financials, REITs, and utilities. A hawkish hold or a hike hits those same names and can firm CAD, which nicks unhedged US holdings in loonie terms (▶ Episode 210 · 2026-10-24).
2. BoC forecasts / Monetary Policy Report — same morning. CMHC already flagged variable-rate mortgage pressure starting early 2027 (▶ Episode 211 · 2026-10-25). The prose matters more than the 25 bps.
3. Microsoft earnings — after the close October 28. Meta just spent $33.9B in a quarter (▶ Episode 208 · 2026-10-22). Microsoft is the next read on whether AI infrastructure spend is still accelerating. That’s your US growth sleeve, not a sideshow.
4. Oil and producer-price follow-through. If crude stays bid after that 14.4% raw-materials spike (▶ Episode 209 · 2026-10-23), Canadian inflation stays sticky, energy keeps relative strength, and duration stays heavy.
5. The earnings-beat filter. 62 of 76 S&P 500 reporters have beaten EPS; 64 grew revenue. Keep the rule: three prior beats, revenue growth above 5%, volume the day after. That’s how ATZ.TO paid and how AMD/AVGO didn’t.

This Week's Listener Challenge

Fifteen minutes. No new buys. Open your TFSA in Wealthsimple, Questrade, or IBKR. List every rate-sensitive holding: Big Six banks, REITs, utilities, preferreds, bond ETFs, covered-call funds. Write the weight as one percentage. If that bucket is over 40%, draft one sentence you will actually follow Wednesday: “If BoC hikes or sounds hawkish, I will trim X / overlay calls / do nothing.” Circle the number. That’s the drill — know your duration before Tiff Macklem speaks.

Canadian Corner

The 3.1% print is a portfolio problem. Canadian dividend investors stuffed banks, REITs, and utilities into TFSAs because the distributions are tax-free there. Still true — TFSA income isn’t taxed — but the prices of those names are rate-sensitive, and a hold-or-hike BoC reprices them whether the dividend is tax-free or not. CIBC ~7% below $170.50 after a $1 billion long-dated note deal (▶ Episode 207 · 2026-10-21) is the market charging a funding-cost discount. Watchlist it; don’t blind-dip it.

Two account-placement rules for this week:

• US dividends belong in the RRSP when you can. The treaty generally waives withholding there; in a TFSA the 15% US withholding is gone for good.
• US growth and AI (Meta, Microsoft, the capex screen) are fine in the TFSA. You’re not clipping a fat dividend, so withholding is small and the room is better used on compounding.

CAD/USD is the stealth risk: a hawkish BoC can firm the loonie and make unhedged US names look worse in CAD even if NASDAQ is flat. FHSA holders targeting a 2027 purchase should treat CMHC’s “variable-rate hikes starting early 2027” as a calendar, not a headline. If you want income without piling on more bank duration, the covered-call overlay — and vehicles like Middlefield’s infrastructure dividend ETF (MINF) — is how you stay paid while Wednesday does its thing (▶ Episode 209 · 2026-10-23).

The Bottom Line

This week proved that income isn’t passive — it’s a hedge against a Bank of Canada that just watched inflation walk out of the target band.

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