TSX Closer: A Record Finish With Cannabis Stocks Smokin'; TD Reintroduces Financial Targets; Gets Fined Again

04:29 PM EDT, 09/29/2025 (MT Newswires) -- The Toronto Stock Exchange eked out another record close on Monday, its first in a week, as Rosenberg Research said "equity markets are frothing, and central banks are committed enablers" before adding "there is no reliable method or quick formula for calling the turn in a FOMO-driven market".

Despite mixed commodity prices, the S&P/TSX Composite Index finished the day up 210.63 points or 0.7% at 29,9971.91, with most sectors higher and Healthcare leading the way in rising 7.6%. Cannabis stocks were higher after U.S. president Donald Trump endorsed the benefits of CBD for seniors. Curaleaf (CURLF) jumped near 35%. Capping gains, Energy was down near 1.5%.

According to Dow Jones Market Data and FactSet, going in to today's trading day the TSX was down near 0.6% from its record close of 29,958.98 on Sept. 22. It was up 32.2% from its 2025 closing low of 22,506.90 on April 8, up 4.2% month to date; and up more than 20% year to date.

On broader markets, Research Economist Mehmet Beceren at Rosenberg Research published a note entitled 'Will the Exuberance Engine Stall? Three Key Signals to Watch' in which he said "equity markets are frothing, and central banks are committed enablers". While writing with the United States in particular focus, he noted the debate over a growing stock bubble is gaining traction, but complacency is also taking root under the Fed's easing cycle. "FOMO (fear of missing out) dominates the market, and few can afford to sit it out," Beceren said. He noted there are many comparisons to past bubbles for timing a reversal, but there is no reliable method or quick formula for calling the turn in a FOMO-driven market. "Each cycle is different, yet they rhyme, especially on how the narrative develops and how sources of leverage provide the primary fuel," he added.

Beceren said: "A compelling technological breakthrough story, easy monetary policy, and opportunistic excessive leverage built up via some seemingly smart financial innovations are the three main ingredients of a "one big bullish buying" spree in the financial markets. That pattern repeats itself consistently in every boom-bust cycle."

He added: "When we look at the historical data on market cycles, big reversals may seem to be predictable by a set of macro indicators -- but that only works in retrospect. By the time the underlying financial issues become visible in the macro data, it is usually too late. Therefore, investors should pay close attention to micro developments in areas of the economy that are fueling the financial leverage engine which might sputter in the future. Local cash flow problems and sequential contagion through the tightening credit channel are the key components. One needs to follow micro developments in certain areas for the smoke signals."

In this cycle, Beceren recommends focusing on three key indicators that might be the most relevant for the high-powered exuberance engine: crypto-driven leverage and crypto-treasury mania; AI-driven capex and bond supply; and the long yields.

Elsewhere, Wells Fargo Investment Institute noted stocks are "generally not as expensive" as the 25 times S&P 500 Index price to earnings (P/E) multiple would suggest. "With full valuations," it said, "we expect equities to be driven by robust-earnings growth rather than multiple expansion through year-end 2026. We would view meaningful pullbacks as opportunities to add exposure to equities."

Among individual stocks Toronto-Dominion Bank (MLWIQXX) (TD.TO, TD), Canada's second-largest bank by market value, was up 0.7% and hit a fresh 52-week high as it released a long-awaited presentation to investors that reintroduced financial targets suspended last year and laid out plans to further cut costs and return capital to shareholders, as The Wall Street Journal reported. "While our business is strong, we are committed to regaining leading performance," President and Chief Executive Raymond Chun said in slides with his presentation.

TD had suspended financial targets including earnings guidance late last year as it reviewed its business options following a U.S. settlement stemming from lapses in its anti-money-laundering controls in the United States and Canada. Ironically then, Canada's consumer-finance regulator today hit TD with a separate C$5.5 million fine for errors that led to customers overpaying interest and principal costs.

For the 2026 fiscal year, The WSJ noted, TD said it is targeting annual growth in adjusted earnings per share of 6-8% and an adjusted return on equity of about 13%. MT Newswires Canada noted it also targets a CET1 Ratio of 13%; Adjusted Expense Growth of 3-4%; and a PCL ratio of 40-50 basis points.

The bank said it expects to return some C$15 billion to shareholders in the next fiscal year, helped by money raised from the sale of its stake in Charles Schwab. Of that sum $8 billion will be returned via share buybacks and $7 billion in common dividends. This is after returning about $13.4 billion through buybacks and dividends in the current year that concludes at the end of October.

In the medium term, The WSJ noted, the bank said it was aiming for adjusted per-share earnings growth of 7-10% by fiscal 2029 and an adjusted return on equity of about 16%. The WSJ also noted restructuring and other efforts are expected to deliver between $2 billion and $2.5 billion in annualized cost savings over the medium term, including about $1.1 billion the bank expects to save in the 2027 to 2028 years.

Of commodities, gold traded at a record high late afternoon Monday on strong safe-haven buying ahead of a likely shutdown of the U.S. government at midnight on Tuesday, while the dollar weakened. Gold for December delivery was last seen up US$46.40 to US$3,855.40 per ounce, topping the Sept. 23 record close of US$3,815.70.

But West Texas Intermediate crude oil closed sharply lower on reports OPEC+ plans to increase production again in November, adding to concerns the market is becoming oversupplied as the cartel continues to look to boost its market share and price competitors out of the market. WTI oil for November delivery closed down US$2.27 to settle at US$63.45 per barrel, while November Brent oil was last seen down US$2.44 to US$67.69.

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