Morning Markets for Tuesday, Jan. 13, 2026

Key Concepts

• Inflation: US Consumer Price Index (CPI) rose 2.7% year-over-year in December, a key economic indicator.
• Trade Relations (Canada-China): Potential easing of restrictions on Canadian canola in exchange for relaxed tariffs on Chinese EVs.
• Market Performance: TSX showing positive start to the year, outperforming US markets; US markets mixed reaction to inflation data.
• Corporate Strategies (McDonald’s & Fast Food): Price freezes and meal deals implemented to address financial insecurity among Canadian consumers.
• Investment Strategy (Lightwater Partners): Focus on mid-cap stocks, identifying undervalued opportunities within the Canadian market.
• Aviation Industry: Delta Airlines’ earnings report and its impact on the sector; concerns about lower-end consumer spending.
• Space Technology (Kepler Communications): Launch of ten data relay satellites enabling real-time data processing in space.
• Financial Sector (JP Morgan): Q4 earnings report, investment banking performance, and potential impact of interest rate cap proposals.

Market Overview & Economic Data (January 26, 2026)

The broadcast covered a range of market and economic updates, beginning with key economic data released. US consumer prices in December increased by 2.7% year-over-year, marking the first complete look at inflation trends in months. Price increases were primarily driven by shelter, food, and energy costs. Despite the easing of inflation throughout the year, it remained uneven across the economy.

Canada-China Trade Discussions

A significant development discussed was a potential trade agreement between Canada and China. Bloomberg News reported that China is proposing to ease restrictions on Canadian canola products in exchange for Canada relaxing tariffs on Chinese-made Electric Vehicles (EVs). Currently, Canada imposes a 100% tariff on Chinese EVs and 25% on steel and aluminum, mirroring US tariffs. China has retaliated with tariffs of 75% on canola seed and 100% on canola oil. While Canadian officials expressed hope for easing trade frictions, they downplayed the prospect of a quick deal on EV tariffs, acknowledging the complexities given US policy.

Market Performance & Analysis

The Toronto Stock Exchange (TSX) was up 0.01% at the time of the broadcast, demonstrating a strong start to the year with a 3.5-4% increase in January. This outperformed US markets. South of the border, the S&P 500 was down 0.16%, and the Dow Jones Industrial Average was down 0.62%, while the NASDAQ was up 0.31%. The market reaction to the inflation data was mixed, suggesting the numbers weren’t universally positive.

Corporate News & Strategies

Several companies were highlighted:

• McDonald’s Canada: Announced a price freeze on select items (small coffee at $1) and a reduction in the price of Milk Value Meals to $5, responding to financial challenges faced by Canadian consumers. This follows similar initiatives by Tim Hortons, Wendy’s, and Burger King.
• Maple Leaf Foods: Shares rose 4% following an announcement of a mid-single-digit revenue growth forecast for 2026, a raised dividend, and planned investments in automation and productivity improvements.
• Delta Airlines: Shares fell 3.35% after reporting a profit growth forecast that fell short of Wall Street estimates. The CEO noted robust travel demand, particularly at the high end, but the market reacted negatively.
• Kepler Communications: Successfully launched ten data relay satellites, enabling real-time data processing in space using laser communication technology. The company is already generating revenue from applications like wildfire detection and orbital data centres.
• JP Morgan: Reported Q4 earnings with a decent EPS beat, but investment banking results were disappointing. The bank is prepared to fight any attempts to cap credit card interest rates.

Investment Strategy & Expert Insights (Jerome Haas, Lightwater Partners)

Jerome Haas, Partner at Lightwater Partners, discussed the Canadian market. He highlighted the outperformance of the TSX and advocated for a focus on mid-cap stocks, which he believes are undervalued and under-researched. He noted that while the banks are at a 14x valuation with 7% growth expected, the real leadership potential lies in the mid-cap space. He emphasized a bottom-up approach to stock selection, looking for compelling stories and undervalued opportunities. Haas pointed out a structural issue in Canada where compliance departments discourage investment advisors from investing in non-compliant (often mid-cap) stocks, leading to an outflow of capital from this segment. He also noted a shift in investor preference towards large US tech companies. He specifically mentioned Kraken Robotics as a promising mid-cap, benefiting from increased Canadian and US defence spending, particularly with the launch of the “Ghost Shark” underwater drone and the $82 billion Canadian defence budget increase. He also highlighted Truelieve Cannabis, anticipating a stock price increase following a potential rescheduling of cannabis by the US Attorney General.

Aviation Industry Analysis (Steven Trent, Independent Aviation Specialist)

Steven Trent discussed Delta Airlines’ earnings report. He noted that while the guidance was lower than expected, the broader concern was the performance of the lower-end consumer. He emphasized that Delta derives most of its revenue from premium cabins and loyalty programs, making it less vulnerable to economic downturns affecting main cabin travel. He highlighted Spirit Airlines as a carrier to watch, given its recent Chapter 11 filing and potential for consolidation. He also discussed the potential impact of a proposed 10% cap on credit card interest rates, suggesting it could restrict credit access for lower-income consumers.

Space Technology & Innovation (Kepler Communications CEO)

The CEO of Kepler Communications explained the company’s new satellite network. The ten launched satellites utilize laser links to enable real-time data relay in space, a significant improvement over traditional methods that can take 30 minutes to 3 hours. This technology has applications in wildfire detection, defence, and orbital data centres. The company is already generating revenue and sees opportunities for growth with increased defence spending and the demand for real-time data access.

Financial Sector Outlook (Stephen Biggar, Argus Research)

Stephen Biggar discussed JP Morgan’s earnings. While the EPS beat was positive, investment banking results were weaker than expected. He noted the potential for a rebound in M&A activity driven by improving CEO confidence, lower interest rates, and a more favourable regulatory environment. He also addressed the potential impact of a cap on credit card interest rates, warning of unintended consequences like reduced credit availability and increased risk.

Synthesis & Conclusion

The broadcast presented a mixed economic picture. While inflation is easing, concerns remain about consumer spending and the potential for economic uncertainty. The Canadian market is showing resilience, particularly in the mid-cap space, while US markets are reacting cautiously to economic data. Innovation in sectors like space technology (Kepler Communications) and strategic responses to consumer challenges (McDonald’s) demonstrate adaptability. The financial sector faces both opportunities (potential M&A activity) and challenges (regulatory pressures). Overall, the market remains dynamic and requires careful analysis and a nuanced investment approach.