04:29 PM EDT, 10/20/2025 (MT Newswires) -- The Toronto Stock Exchange recovered some lost ground on Monday after two losing sessions, buoyed by a record gold price and the prospect of another interest rate cut here in Canada, even as David Rosenberg says "we are in a classic equity bubble" and adds "everybody thinks they are nimble enough to time the peak".

Despite mixed commodity prices, the resources-heavy S&P/TSX Commodities Index rose 307.96 points, or 1%, to 30,416.44, after falling by nearly 530 points over last Thursday and Friday. Monday's gains still left the index more than 200 points below the record close of 30,637.12, hit last Wednesday. Among sectors, most were higher, led by Health Care up near 3.2% and Base Metals up near 3%. The Battery Metals Index was down by more than 6% and Telecom down by near 1%.

Boosting sentiment, The Canadian Press reported executives for Rockpoint Gas Storage (RGSI.TO) have big plans for the company after it made "quite an impression" on the TSX with a "mammoth sized" initial public offering (IPO) this month. Calgary-based Rockpoint raised $704 million, pricing its offering at $22.00 per share.

It is the second company to debut on the TSX this year after GO Residential Real Estate Investment Trust (GO-U.TO) in July. "Natural gas storage is playing such an important role," said Toby McKenna, CEO of Rockpoint told BNN Bloomberg in a Monday interview. "The way that investors are receiving us has been extraordinary." Rockpoint, which is 40% owned by investment giant Brookfield Asset Management ( BAM ) , and is the largest natural-gas storage operator of its kind in North America, closed up $0.11 or 0.4% at $25.50.

Also helping to boost positive market sentiment, RBC said today's Q3 Business Outlook Survey (BoS) leaves the Bank of Canada "on track" for another rate cut.

Spanning early August to early September, most information in the BoC's BoS was gathered during a period of "elevated but moderately stabilizing" global trade tensions, RBC noted. "Overall," RBC said, "the details aligned with our expectations -- economic growth showed signs of stabilizing in Q3, but remained at weak levels that will limit upside inflation risks. While this week's Canadian CPI inflation data will be closely watched, available information supports another BoC rate cut next week."

Elsewhere, TD noted business and consumer optimism improved slightly in Q3, reflecting a modest easing of trade tensions, greater clarity on tariff measures and an improvement in household financial health supported by rising net worth. However, it also noted, the overall level of sentiment remained subdued for both businesses and consumers. "Beneath the surface, conditions in the steel and aluminum sectors have worsened, with firms in these industries reporting especially weak outlooks that are leading to significant layoffs."

TD noted while longer-term consumer inflation expectations rose, they are similar to levels prior to the pandemic, suggesting consumers tend to overestimate longer-term inflation. "Moreover," TD added, "given that the survey was conducted before the federal government announced plans to remove counter-tariffs, we think inflation expectations may ease next quarter. The reports of weaker pricing power among firms are encouraging from inflation perspective, even if they point to narrower profit margins for businesses."

It is against all of this backdrop that Rosenberg, a veteran market watcher, published a note entitled 'Not So Tiny Bubbles' in which he says "it is very clear to us that we are in a classic equity bubble". But, Rosenberg adds, "these episodes typically go further than you think, but never correct by going sideways". And, Rosenberg notes, "typical of human nature, when greed becomes the primal emotion (clearly the case today), everybody thinks they are nimble enough to time the peak".

Bottom line for Rosenberg, "A bubble is defined by a market that loses touch with underlying fundamentals and where all the multiples (price-to-earnings, price-to-sales, price-to-book, the CAPE, the Buffett Model) trade north of 2 standard deviations. Not that the earnings fundamentals are not good, but that the price action is double the underlying earnings streams. Whatever it is we end up seeing coming out of the AI boom in terms of the future impact on productivity, the economy, and earnings, the reality (after you do the math in backing out the message from Mr. Market) is that the expectation embedded in today's valuations entails that average annual earnings growth will explode to a +15% rate from now to 2030. That is not impossible, but still represents a 1-in-10 event. The last time we saw this phenomenon was back in the late 1990s tech boom -- the Internet, as we all know, was a game-changer from a personal and commercial standpoint, but remember what happened to super-inflated expectations from 2000 to 2003 as they reverted to the mean after hitting an extreme."

Of commodities, gold prices traded at a fresh record high on Monday, rebounding from Friday's fall on expectations traders are not yet ready to turn bearish on the metal. Gold for December delivery was last seen up $164.30 to US$4,377.40 per ounce, topping Thursday's record close of US$4,304.60.

But West Texas Intermediate crude oil price closed with a small loss, dropping for the fourth time in five days to the lowest in more than five months as supply rises above demand, pushing up global inventories. WTI crude oil closed down $0.02 to settle at $57.52 per barrel, the lowest since May 7, while December Brent crude was last seen down $0.32 to $61.00.