Morning Markets for Monday, Jan. 19, 2026

Key Concepts

• Canadian Inflation: Consumer Price Index (CPI) rose to 2.4% in December, exceeding expectations, influenced by the end of a GST rebate and rising food prices.
• US-EU Trade Tensions: President Trump threatens 10% tariffs on EU goods, prompting potential retaliatory measures from the EU.
• Mullen Group Performance: Canadian trucking and logistics firm targeting $2.4 billion in revenue, driven by acquisitions and infrastructure spending.
• Trump’s Pursuit of Greenland: Escalating US interest in acquiring Greenland, leading to diplomatic tensions with Denmark and Canada.
• TSX Performance: The Toronto Stock Exchange is slightly up, driven by gains in gold and silver mining stocks.
• Critical Minerals & Trade: US exempting critical minerals from tariffs, potentially creating leverage for Canada in trade negotiations.
• Bank of Canada Outlook: The Bank of Canada is unlikely to change its interest rate decisions in the short term despite the inflation increase.

Canadian Economic Update & Market Performance

The Canadian Consumer Price Index (CPI) rose to 2.4% year-over-year in December, surpassing expectations. This increase was partially attributed to the expiry of a Goods and Services Tax (GST) rebate at the end of 2024, which artificially inflated yearly price comparisons. Food prices saw a significant increase, rising over 6% year-over-year, while gasoline prices experienced a year-over-year decline. Dominic Lapointe of Manulife Investment Management noted that while the headline number is higher, core inflation measures are moderating, suggesting the Bank of Canada is unlikely to alter its current monetary policy. A surprising 35% month-over-month spike in air transportation prices was also observed, though its long-term impact remains uncertain. The Bank of Canada’s Business Outlook Survey indicates limited pricing power for businesses and potential for reduced hiring.

The TSX is currently trading slightly up (0.06%) despite the hotter-than-expected inflation report. Gains are primarily driven by the performance of gold and silver mining stocks, which have reached record highs due to geopolitical uncertainty.

US-EU Trade Conflict & Greenland Acquisition Attempt

President Donald Trump has threatened to impose a 10% tariff on approximately $108 billion (Euros) worth of US goods if the European Union doesn’t agree to a deal for the “complete and total purchase” of Greenland. This has prompted the EU to consider retaliatory tariffs of a similar magnitude. David Doyle of Maguire Group emphasized the significance of this shift in tone, contrasting it with the perceived progress on trade issues in the latter half of 2025. The EU’s response has been stronger than in previous instances, raising the risk of substantial retaliation. Canada is also potentially at risk of tariffs if it participates in military exercises in Greenland, as Prime Minister Mark Carney has suggested. The situation poses a potentially dangerous test of US partnerships with European allies and could damage the NATO alliance. Trump’s Treasury Secretary argued that owning Greenland is essential to US national security.

Corporate Performance & Sector Trends

• Mullen Group: The Canadian trucking and logistics firm is targeting up to $2.4 billion in revenue, fueled by recent acquisitions, improving freight demand, and infrastructure spending. The company is also investing in robotics for warehouse improvements and data management tools.
• Chiara: Shares of Chiara fell as much as 3.5% due to an outage at its Alberta Enviro Fuels facility, expected to last until May, with an estimated $110 million impact.
• IAMGOLD: The miner’s stock is performing well, driven by strong quarterly production and optimistic 2025 production targets (up to 820,000oz).
• Sierra: Shares are down due to a shutdown at its Alberta Enviro Fuels facility, impacting its 2026 outlook.
• Gold & Silver Miners: Stocks like Agnico Eagle and Franco-Nevada are benefiting from rising gold and silver prices, driven by geopolitical uncertainty.
• Defence Stocks: Companies in the defence sector are attracting investor attention due to the escalating tensions surrounding Greenland.
• Crypto Stocks: Conversely, cryptocurrency stocks are declining as investors seek safer assets.

Canada’s Critical Minerals & Trade Leverage

The US decision to exempt critical minerals from tariffs presents a potential opportunity for Canada. Canada possesses significant reserves of these minerals, which are essential for US military applications and the transition to clean energy. Negotiating a floor price for these minerals could accelerate their development and provide Canada with leverage in trade negotiations with the US, particularly as China also seeks access to these resources.

KPMG Report on M&A Activity

A new report from KPMG indicates that Canada’s “nation building agenda” and favourable business environment are expected to spur mergers and acquisitions (M&A) activity in 2026. Approximately one-third of Canadian businesses are planning major acquisitions, primarily to build capacity and expertise. Sectors expected to see the most activity include infrastructure, healthcare, and those related to the AI value chain. The report also notes that businesses are incorporating more structured deal terms, such as earnouts, to mitigate risks associated with trade uncertainty.

Synthesis/Conclusion

The global economic landscape is increasingly volatile, marked by escalating trade tensions, geopolitical uncertainty, and shifting priorities. Canada is navigating these challenges with a focus on strengthening its domestic economy, diversifying trade relationships, and leveraging its natural resources. While inflation remains a concern, the Bank of Canada appears poised to maintain its current course. The US-EU trade dispute and the US pursuit of Greenland present significant risks, but also potential opportunities for Canada to assert its strategic importance. The anticipated surge in M&A activity reflects a proactive approach by Canadian businesses to adapt to the changing environment and capitalize on emerging opportunities.