The Open for Thursday, Jan. 8, 2026

Key Concepts

• Geopolitical & Economic Uncertainty: Global events (US elections, US-China relations, Arctic security, conflicts) are driving market volatility and influencing investment strategies.
• AI Dominance & Investment: Artificial Intelligence remains a primary driver of market valuations, with investors assessing the sustainability of the rally and seeking opportunities beyond large-cap players.
• Defence Sector Growth: Increased global defence spending, particularly in Europe and the US, is creating opportunities in defence stocks.
• Canadian Trade Diversification: Canada is actively diversifying its export markets away from the US, with increasing trade with countries like China and the UK.
• Real Estate Market Shifts: The real estate market is experiencing significant changes, with office space showing signs of recovery, condo markets slowing, and regional variations (Calgary performing well).

Market Overview & Global Influences (Part 1 & 2)

The broadcast began with a review of market performance as of the time of airing. US futures were showing weakness, particularly in Big Tech, while the TSX was down approximately 1% from recent highs (though up 1% year-to-date). Oil prices were up around 2%, trading above $57 USD, reversing a year-long decline. Gold faced selling pressure due to anticipated commodity index rebalancing, and Bitcoin was down around 1%, falling below $90,000 USD. The Canadian dollar was slightly down against the US dollar, trading around $0.72 USD.

A significant theme throughout both segments was geopolitical noise, including Donald Trump’s potential actions (Venezuelan leader capture, Greenland annexation), questions surrounding NATO’s future, and the broader US-China relationship. Despite these concerns, AI continued to dominate investor discussions and drive market valuations. Canada is actively diversifying its export markets, with exports to the US falling to 67% in October – the lowest level since 1997 (excluding the pandemic). This was accompanied by a $583 million trade deficit, lower than expected, and increased exports to non-US countries, notably gold to Britain and oil to China. Increased market volatility is anticipated in 2026 due to various geopolitical and economic factors.

Corporate Developments & Investment Opportunities (Part 1 & 2)

Several corporate developments were highlighted. Telus engaged TD and Jefferies to explore monetization strategies for its Telus Health division. Lundin Gold announced a potentially “world-class” copper deposit discovery in Ecuador. MDA Space secured an indefinite delivery, indefinite quantity (IDIQ) contract with the US Missile Defence Agency (MDA) for the “Golden Dome” initiative, a $151 billion procurement vehicle.

The defence sector emerged as a key investment area, fueled by a proposed $1.5 trillion US defence budget for 2027 (up from $900 billion) and increased spending in Europe. Specific stocks highlighted included Rheinmetall (RHEMY), a four-star rated stock trading at an 18% discount to fair value with a “wide economic moat,” Huntington Ingalls (America’s largest military shipbuilder), and Northrop Grumman (benefiting from B-21 bomber deliveries). NVIDIA was still considered undervalued, but future performance is contingent on AI CAPEX guidance from hyperscalers. ETFs like the Global X Defence Tech Index ETF (63% US weighted) and the iShares US Aerospace & Defence Index ETF were also discussed.

Expert Commentary & Stock Picks (Part 1)

Grant White (Endeavour Wealth Management) emphasized the importance of diversified portfolios with quality names, suggesting investors look beyond well-known AI stocks. He recommended Mercado Libre (Latin American Amazon), CNX Resources (energy, benefiting from AI-driven energy demand), and Cipher Pharmaceuticals as potential investments. Filippo Falorni (Citi Research) expressed a neutral rating on Constellation Brands, citing headwinds from the Hispanic consumer base and broader challenges in the beer industry, and a preference for the soft drink sector (Coca-Cola, Pepsi, Keurig Dr Pepper).

Real Estate Market Analysis (Part 2)

The real estate market was analyzed with a nuanced perspective. Office space absorption was picking up, driven by return-to-office mandates, leading to a drop in downtown core vacancy rates. A “flight to quality” was observed. The Toronto condo market was slowing due to a mix issue (small units), declining non-permanent resident immigration, and a tanking market, with distress expected to continue in 2026. The rental market remained decent but with limited growth. The industrial sector (warehouses) had slowed from its COVID-era boom but remained healthy. Calgary real estate was an exception, showing positive momentum due to commodity prices, affordability, and immigration. Limited new office construction is expected to further reduce vacancy rates.

Canadian Trade & Arctic Security (Part 2)

Canada’s efforts to diversify its trade relationships were further discussed, with a 2.1% increase in total exports in October driven by gold shipments to the UK. The upcoming Prime Minister’s trip to China aims to address trade issues (canola, seafood, pork tariffs) and discuss energy, agriculture, and international security. The speaker cautioned maintaining a balance to avoid straining relations with the US. The importance of bolstering Arctic security, including infrastructure upgrades, fighter aircraft procurement, and missile defence capabilities, was emphasized, alongside collaboration with the US and other Arctic Council countries. Donald Trump’s expressed interest in acquiring Greenland was noted as a rhetorical but strategically significant event.

Conclusion

The broadcast painted a picture of a complex global landscape characterized by geopolitical uncertainty, the continued dominance of AI, and shifting economic dynamics. Investment opportunities exist in the defence sector, driven by increased spending, and in specific regional real estate markets like Calgary. Canada is actively diversifying its trade relationships, but must navigate the delicate balance between its relationship with the US and its growing ties with China. A key takeaway is the anticipation of increased market volatility in the coming year, requiring investors to prioritize diversification, quality, and a long-term perspective.