Morning Markets for Friday, Jan. 9, 2026

Key Concepts

• Canadian Economy: Job growth, unemployment rate, economic outlook, Bank of Canada rate policy.
• Market Performance: TSX record highs, S&P 500, Dow Jones, NASDAQ performance, sector analysis (Materials, Energy).
• Corporate Earnings: Aritzia’s revenue and profit increase, Tilray’s revenue and profit beat, West Fraser Timber’s impairment charge.
• Mergers & Acquisitions: Potential merger between Glencore and Rio Tinto, implications for the mining industry.
• Global Trade: Impact of KUSMA renegotiations, US tariffs, trade diversification.
• Innovation & Technology: Argo Sasquatch amphibious vehicle for disaster relief.
• Economic Indicators: US employment data, inflation, consumer spending.

Canadian Economic Update & Market Performance

The Canadian economy added 8,200 jobs in December, exceeding expectations of a 2,500 job loss. This marks the fourth consecutive month of job gains, primarily driven by full-time employment in the healthcare and social assistance sectors. However, the unemployment rate rose to 6.8%, reaching the highest level in three years, attributed to increased labour force participation rather than layoffs. Economists describe the situation as “muddling through,” with BMO suggesting Canada is “just hanging in there.” The Bank of Canada is not expected to cut rates in the near future, despite the unemployment increase, as they prioritize controlling inflation. Jemmy Jean, Chief Economist at Desjardins Group, believes rate cuts are unlikely, emphasizing the need for investment and trade diversification.

The Toronto Stock Exchange (TSX) reached record territory, up 0.73% for the day, continuing a winning streak. US markets also saw gains: the S&P 500 rose 0.39%, the Dow Jones increased by 0.22%, and the NASDAQ climbed by over 0.5%.

Corporate Performance Highlights

Aritzia: Shares of Aritzia increased by 5.14% following a stronger-than-expected quarterly profit and revenue, exceeding Bay Street expectations. Revenue jumped 43% compared to the previous year, with same-store sales increasing across all categories. The company attributes this success to higher US sales, digital initiatives, and marketing efforts.

Tilray: Tilray’s stock rose 2.3% after reporting net revenue and profit that surpassed estimates. Distribution sales were 26% higher year-over-year, and the cannabis business benefited from increased sales in Canadian and international markets. Tilray anticipates growth in its medical cannabis unit following President Trump’s move to reclassify cannabis.

West Fraser Timber: West Fraser Timber announced a $409 million impairment charge related to its US lumber operations, citing persistently challenging economic conditions and changing product pricing trends.

Glencore-Rio Tinto Potential Merger

Glencore has confirmed discussions with Rio Tinto regarding a potential merger, which could create a company valued at over $200 billion. The primary strategic rationale behind the potential merger is copper, with Glencore being a major producer (approximately 1 million tons per year) and Rio Tinto producing around 700,000 tons. The deal could involve a full acquisition or a combination of assets. A key consideration is Rio Tinto’s willingness to retain Glencore’s coal assets, despite having divested its own coal holdings eight years ago. The outcome of the negotiations is expected by February 5th.

Global Economic & Trade Considerations

US employment slowed in December, with an estimated 50,000 jobs added, below consensus expectations. However, the unemployment rate remained relatively stable. The Federal Reserve is expected to remain data-dependent in its monetary policy decisions, with a potential rate cut in March. A significant concern is the widening income inequality in the US, with the top 10% of households accounting for a substantial portion of consumer spending.

The renegotiation of KUSMA (the Canada-United States-Mexico Agreement) is a major wildcard for the Canadian economy, with uncertainty potentially hindering business investment and hiring. The US Supreme Court did not rule on challenges to President Trump’s global tariffs, leaving the possibility of significant refunds for importers.

Innovation Spotlight: Argo Sasquatch

GlobalMedic, a Canadian disaster relief charity, is utilizing the Argo Sasquatch, an amphibious vehicle made in Canada, to enhance its rescue capabilities. The Sasquatch can swim, climb, and navigate challenging terrain, making it ideal for disaster response in harsh environments. The vehicle was funded by the Ontario government and is expected to improve rescue efforts in the province. The manufacturer, however, faces challenges due to US tariffs on raw materials.

Market Outlook & Investment Strategy (Edward Jones)

Edward Jones Canada projects positive returns for the Canadian market in its fourth year of a bull market, driven by double-digit earnings growth and improving economic conditions. They recommend a diversified investment approach, with a focus on materials, energy, and industrials. While remaining optimistic about the tech sector, they suggest broadening investment portfolios to include other sectors and geographies. They anticipate inflation will slow, potentially allowing the Bank of Canada to hold rates steady throughout the year.

Notable Quotes

• Lindsay (BNN Bloomberg): “It seems as though Canada is going to continue to muddle through… Canada is just hanging in there.”
• Jemmy Jean (Desjardins Group): “We need to see more investment. We need to see trade diversification. And really, the Bank of Canada interest rates only play a secondary role in boosting that.”
• Travis O’Rourke (Hays): “I feel good about it [the job numbers]. I think we have shown to be a very resilient economy.”
• Rahul Singh (GlobalMedic): “This, to me, is the future at GlobalMedic. We always want to innovate as part of our way of getting the right aid to the right people at the right time.”

Technical Terms

• Statscan: Statistics Canada, the national statistical agency of Canada.
• TSX: Toronto Stock Exchange, the main stock exchange in Canada.
• S&P 500: Standard & Poor's 500, a stock market index representing the performance of 500 large-cap companies in the United States.
• Dow Jones: Dow Jones Industrial Average, a price-weighted measure of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the Nasdaq.
• NASDAQ: National Association of Securities Dealers Automated Quotations, an electronic stock exchange.
• KUSMA: Canada-United States-Mexico Agreement, a free trade agreement between the three countries.
• ESG: Environmental, Social, and Governance, criteria used to assess the sustainability and ethical impact of an investment.
• Impairment Charge: A reduction in the book value of an asset due to a decline in its fair value.

Conclusion

The Canadian economy demonstrates resilience with continued job growth, despite a rising unemployment rate. Markets are performing strongly, driven by corporate earnings and positive global economic signals. The potential merger between Glencore and Rio Tinto could reshape the mining industry, while ongoing trade uncertainties and income inequality remain key concerns. Innovation, exemplified by the Argo Sasquatch, offers solutions for disaster relief. Overall, the outlook for 2026 is cautiously optimistic, with a focus on diversification and strategic investment.