Canadian stocks are poised for a promising start on Tuesday, buoyed by the rising prices of crude oil and gold, which are expected to spur buying in the energy and metal sectors. Nonetheless, investor sentiment may be tempered due to concerns about a potential trade conflict, as U.S. President-elect Donald Trump has announced plans to levy tariffs on imports from Mexico, Canada, and China.
Trump has reiterated his intention to significantly increase tariffs on goods from these countries immediately upon assuming office. He attributes this move to the need to address illegal immigration and the influx of "crime and drugs" from these nations into the United States.
In a statement posted on Truth Social Monday, Trump declared, "On January 20th, among my initial Executive Orders, I will authorize the imposition of a 25% tariff on all products from Mexico and Canada entering the United States, in response to their Open Borders policies." He emphasized that this tariff will persist until the influx of illegal substances, particularly fentanyl, and unauthorized migrants ceases. Additionally, Trump mentioned that import duties on Chinese products would rise by 10% unless Beijing curbs the flow of illegal drugs into the U.S.
In corporate earnings news, Calian Group Ltd. (CGY.TO) reported an adjusted net profit of $11.5 million for the quarter ending September 30, 2024, compared to $12.7 million in the same period the previous year. Meanwhile, Alimentation Couche-Tard Inc. (ATD.TO) announced second-quarter fiscal 2025 net earnings of $708.8 million, or $0.75 per diluted share, down from $819.2 million, or $0.85 per diluted share, in fiscal 2024's second quarter.
On the economic calendar, preliminary data on Canadian wholesale sales for October is scheduled for release at 8:30 AM ET.
Despite reaching a new all-time high by mid-morning, the Canadian market concluded Monday on a negative note due to notable declines in energy and material sectors. The announcement that Trump intends to nominate billionaire hedge fund manager Scott Bessent as Treasury Secretary provided a slight boost to U.S. stocks, positively influencing sentiment on Bay Street.
The S&P/TSX Composite Index, after peaking at 25,542.57, ultimately closed down 21.30 points, or 0.08%, at 25,422.98.
Asian markets ended mostly lower on Tuesday following Trump's announcement of a 25% tariff on imports from Mexico and Canada, along with an additional 10% on China, intensifying fears of a trade war resurgence.
In Europe, stocks are pressured by similar trade war concerns following Trump's tariff pledges, compounded by French political tensions as far-right leader Marine Le Pen threatened to destabilize the minority government unless revisions are made to the budget bill.
In the commodities market, West Texas Intermediate crude oil futures have increased by $0.69, or 1%, to $69.63 per barrel. Gold futures have risen by $13.00, or 0.5%, to $2,631.50 an ounce, while silver futures are trading up $0.361, or 1.19%, at $30.600 an ounce.
