Morning Markets for Friday, Feb. 6, 2026

Key Concepts

• Canadian Economy: Job losses in January, particularly in manufacturing, contrasted with a decrease in the unemployment rate due to people leaving the workforce.
• Stellantis: Significant $25 billion write-down due to EV strategy shift, sale of battery plant stake, and concerns about Canadian investment.
• OpenText: Strong quarterly performance driven by cloud revenue and content management.
• Market Rebound: US and Canadian markets showing recovery after a volatile week, driven by buying on the dip.
• AI Investment: Concerns about the scale and timing of returns on AI investments, particularly at Amazon.
• Labour Market Dynamics: Shift from part-time to full-time employment, and the concerning trend of people exiting the workforce.
• Kuzma (Canada-US Trade): Uncertainty surrounding future trade agreements impacting manufacturing investment.
• Super Bowl & Olympics Advertising: Shift towards entertainment and nostalgia in advertising strategies, and the evolving role of these events in brand storytelling.

Canada's Economic Data & Market Performance

Canada’s economy experienced a loss of nearly 25,000 jobs in January, a significant deviation from the expected gain of 5,000, according to Statistics Canada. The manufacturing sector was particularly affected, attributed to ongoing U.S. tariffs. This marks the steepest job decline since August of last year. However, the unemployment rate unexpectedly decreased to 6.5% due to 92,000 people exiting the labour force. Travis O’Rourke, President at Hays, noted the data is “wild” and can be interpreted positively or negatively depending on focus, highlighting the contrasting trends in full-time vs. part-time employment and provincial variations (Ontario down 67,000 jobs, Alberta up 20,000). He expressed concern about the skills mismatch in Canada, suggesting a lack of qualified candidates to fill available positions.

The TSX is currently up by more than a percentage point, driven primarily by material stocks. US markets are also showing a positive trend, with the S&P 500, Dow Jones, and NASDAQ all trading up, indicating a “buying on the dip” response to earlier week’s sell-off.

Corporate Developments

Stellantis: The automaker is taking a $25 billion+ write-down linked to its EV strategy, cancelling products due to lower-than-expected volumes and profitability. They are also selling their stake in a battery manufacturing plant in Ontario to LG Energy Solution, established in 2022, giving LG full ownership. Gabrielle Coppola of Bloomberg News highlighted that this write-down is larger than those of GM and Ford, stemming from internal operational issues and challenges in the European market. The situation raises concerns about Canadian investment, particularly given previous disputes over relocating production to the US.

OpenText: The Canadian software company exceeded profit and revenue expectations in its latest quarter, with cloud revenue increasing by nearly 4% year-over-year. Strong performance in the content management unit also contributed to the positive results.

Amazon: Announced plans to spend $200 billion this year on AI data centres, chips, and equipment, $50 billion more than analysts anticipated. This sparked concerns about the timing of returns on these investments, contributing to a decline in Amazon’s share price.

Canopy Growth: Posted net revenue and profit for its third quarter, exceeding expectations, driven by strength in the Canadian market and cost-cutting initiatives. However, international markets revenue fell by 31% compared to the previous year.

Labour Market Analysis & Future Outlook

Earl Davis, Head of Fixed Income and Money Markets at BMO Global Asset Management, analyzed the jobs report, noting the positive aspect of full-time job gains but cautioning against solely focusing on the headline number. He believes the Bank of Canada will need to differentiate between structural changes (tariffs, population growth) and cyclical changes when formulating monetary policy. He anticipates the Bank of Canada will remain on hold, with a potential for one rate cut later in the year, contingent on further economic data. Davis also highlighted the long-term trend of declining labour force participation due to demographic factors and potential skills mismatches.

Advertising Trends: Super Bowl & Olympics

Bobby Day, President and Co-Founder of Panoply Media, discussed the shift in advertising strategies for the Super Bowl and Winter Olympics. He noted a return to entertainment and nostalgia in Super Bowl ads, contrasting with last year’s focus on political statements. The Super Bowl’s reach and captive audience remain a significant draw for advertisers. He highlighted the Xfinity ad featuring Jurassic Park as an example of successful storytelling, leveraging nostalgia and entertainment value. The Olympics, he explained, offer a longer-term branding opportunity, allowing advertisers to build relationships with viewers over the duration of the games.

Technical Terms & Concepts

• Write-down: A reduction in the book value of an asset.
• Capex (Capital Expenditure): Funds used by a company to acquire, upgrade, and maintain physical assets.
• Skills Mismatch: A gap between the skills employers need and the skills available in the workforce.
• Kuzma: Refers to the ongoing negotiations for a modernized Canada-United States trade agreement.
• Basis Points: A unit of measurement used in finance to describe the percentage change in an interest rate or yield (1 basis point = 0.01%).

Logical Connections

The report establishes a clear connection between macroeconomic factors (US tariffs, global economic uncertainty) and their impact on specific companies (Stellantis, Amazon) and the Canadian economy as a whole. The discussion of the labour market data is linked to potential monetary policy decisions by the Bank of Canada. The advertising segment provides a separate, but relevant, perspective on consumer sentiment and brand strategies in the current economic climate.

Data & Statistics

• Job Loss: Nearly 25,000 jobs lost in Canada in January.
• Unemployment Rate: Decreased to 6.5%.
• Labour Force Exit: 92,000 people exited the Canadian workforce in January.
• Stellantis Write-down: $25 billion+.
• Amazon Capex: $200 billion planned spending on AI infrastructure.
• OpenText Cloud Revenue Increase: Nearly 4%.
• Canopy Growth Revenue: $74 million.
• TSX Increase: Up by more than a percentage point.
• US Market Increase: S&P 500, Dow Jones, and NASDAQ all trading up.

Synthesis & Conclusion

The Canadian economy faces headwinds from global trade uncertainties and a shifting labour market. While the unemployment rate decreased, the underlying reasons – people leaving the workforce – are concerning. Corporate performance is mixed, with some companies (OpenText) exceeding expectations while others (Stellantis, Amazon) face significant challenges. The market is showing resilience, but ongoing volatility is expected. Advertising strategies are adapting to the current environment, prioritizing entertainment and nostalgia over political messaging. Overall, the economic outlook remains uncertain, requiring careful monitoring of key indicators and a cautious approach to investment.