Morning Markets for Friday, Jan. 2, 2026

Key Concepts

• Denison Mines: Canadian uranium company poised to begin construction of a new mine in Saskatchewan.
• Tariff Delays: US President Trump delayed tariff increases on imported furniture, benefiting companies like Wayfair and RH.
• Tesla Deliveries: Tesla reported lower-than-expected fourth-quarter deliveries and annual sales decline.
• Aluminum Price Surge: Aluminum prices rose above $3,000/tonne due to Chinese smelting capacity caps and European production constraints.
• Team Canada: Provincial and territorial premiers uniting to defend Canada against US trade threats.
• Free Trade & Labour Mobility Act (Bill C-5): New legislation aiming to reduce interprovincial trade barriers.
• Immigration Policy Shift: Canada is reducing immigration targets and capping temporary workers/students due to housing and infrastructure pressures.
• AI Impact on M&A: Artificial intelligence is becoming a key factor in mergers and acquisitions, driving deal flow and valuation.

Market Overview & Corporate News (January 1st, 2026)

The trading day began with initial gains but ended mixed. The TSX Composite was up marginally (0.02%), while US markets showed a more volatile pattern. The S&P 500 and NASDAQ finished down (0.2% and 0.36% respectively), while the Dow Jones barely held positive territory. 2025 overall was a positive year for the TSX, up 28%.

Denison Mines (TSX): Experienced the largest gain on the TSX, up over 12%, driven by the impending start of construction on its uranium mine in Saskatchewan. The project, expected to begin production by mid-2028, will be Canada’s first major new uranium mine since Cigar Lake. However, total project costs are now estimated at over $500 million, a 20% increase.

Wayfair & RH: Shares of these furniture retailers received a boost following President Trump’s decision to delay a 30% tariff on upholstered furniture and a 50% levy on kitchen cabinets and vanities until January of next year. The tariffs were originally scheduled to take effect Thursday.

Tesla: Reported a significant drop in fourth-quarter deliveries and a nearly 9% decline in annual sales, missing Wall Street estimates. This is attributed to the withdrawal of tax incentives and investor concerns about the company’s 2026 sales targets.

Aluminum Prices: Surged above $3,000 USD per tonne for the first time in over three years, driven by a cap on Chinese smelting capacity and higher electricity prices impacting European production. This has led to a decrease in global inventories. Demand from the construction and renewable energy sectors is also contributing to the price increase.

Trade & Political Landscape: "Team Canada" & US Relations

The report highlighted the role of Canadian provincial and territorial premiers, dubbed “Team Canada,” in uniting against US trade threats in 2025. This involved retaliatory measures like removing US liquor from store shelves (Manitoba) and threats of restricting power sales to the US (Ontario’s Doug Ford). However, internal disagreements emerged, particularly between Alberta’s Danielle Smith and Ontario’s Doug Ford regarding potential oil export taxes.

CTV’s Andrew Johnson reported on the tensions, noting Smith’s visit to Donald Trump and her stance against retaliation, while Ford advocated for a more aggressive approach. The report also touched on the potential for Alberta separation, with Smith stating she would respect the outcome of a citizen-initiated referendum.

The new Free Trade and Labour Mobility in Canada Act (Bill C-5) came into effect in 2026, aiming to remove interprovincial trade barriers. A mutual recognition agreement between provinces and the federal government will be implemented by June. However, challenges remain, particularly with alcohol regulations. Canada’s free trade agreement with the US and Mexico is up for review, adding further pressure to strengthen the domestic economy.

Economic Outlook & Investment Strategies

Kelsey Keene, Director of Equity Capital Markets at National Bank of Canada, discussed the oil market outlook. Oil prices were down approximately 1% on the first trading day of 2026, despite a rough finish to 2025. Keene anticipates continued volatility due to potential oversupply and geopolitical risks. She advises investors to diversify portfolios and focus on quality names with stable earnings.

Dan Ives of Wedbush described 2026 as an “inflection point” for the AI revolution. He expects tech stocks to rise 20-25% and highlighted the importance of companies like NVIDIA and Tesla in the autonomous robotics space. Ives emphasized the need for investors to understand the risks and rewards of AI investments.

Key Investment Themes:

• AI: A major driver of growth, with significant investment and potential for disruption.
• Energy: Continued volatility expected, requiring a cautious approach.
• Luxury Goods: High-end consumers remain cautious but continue to spend, particularly on quality items.
• Diversification: Essential for mitigating risk in a volatile market.

Immigration & Labour Market Changes

Canada is significantly altering its immigration policy in response to pressures on housing, healthcare, and infrastructure. The government is reducing immigration targets, capping temporary workers and international students. In 2018, temporary residents represented 3.3% of the population; by 2024, this figure had more than doubled to 7.5%.

The reduction in international student visas has led to program cancellations and job losses at colleges and universities. The government is prioritizing immigration in sectors with critical labour shortages, including healthcare, social services, education, and the trades. The changes have sparked criticism from businesses in Quebec, who argue they are unable to fill vacant positions. The government maintains its commitment to attracting skilled talent while ensuring sustainable population growth.

Conclusion

2026 is shaping up to be a year of recalibration for Canada, marked by shifts in trade policy, immigration, and economic priorities. While the market began the year with mixed signals, key sectors like uranium and AI present opportunities for growth. The success of Canada’s new economic strategy will depend on navigating complex geopolitical challenges, fostering interprovincial cooperation, and adapting to a rapidly changing global landscape. The emphasis on sustainable growth and targeted immigration signals a move away from the rapid expansion of recent years towards a more balanced and strategic approach.