Trading Day for Thursday, Feb. 19, 2026

Key Concepts

• Trade Deficit (Canada): Canada recorded a record trade deficit of $31.3 billion in 2025, excluding the pandemic period.
• MTY Food Group: Posted adjusted profits exceeding estimates, driven by franchise growth and distribution.
• Molson Coors: Experienced lower-than-expected profits due to tightening consumer spending and increased aluminum prices.
• Credit Spreads: Divergence in credit spreads is emerging, particularly in the US, linked to AI disruption.
• TSX & US Markets: TSX is marginally positive, while US markets (S&P 500, Dow, NASDAQ) are down.
• Equinox Gold: Announced its inaugural dividend and is focused on organic growth, particularly in Canada and Mexico.
• Pan American Silver: Reported record earnings driven by strong production, cost control, and rising silver prices.
• Teck Resources: Delivered a mixed quarter with earnings beating expectations, but a high capital budget is a concern.
• MDA Space/49 North: Created a subsidiary, 49 North, to focus on Canadian national defence priorities.
• Alamos Gold: Reported record free cash flow, with expansion projects at Mulatos and Island Gold driving future growth.

Canada's Economic Snapshot & Market Performance

Canada recorded its largest annual trade deficit on record (excluding the pandemic) in 2025, totaling $31.3 billion. While annual exports declined overall, exports of gold, silver, and platinum increased by nearly 42% due to rising metals prices. Exports to the US, however, fell by 5.8%. The TSX is currently clinging to a slight gain (0.07%), while US markets are experiencing declines: S&P 500 is down 0.6%, Dow down 0.8%, and NASDAQ down 0.62%. This divergence is partially attributed to the stronger performance of technology stocks driving a recovery in the S&P 500.

Corporate Performance Highlights

MTY Food Group: Shares are up 4.5% following the release of fourth-quarter results. Adjusted profits beat estimates, with revenue increasing by 7%, fueled by growth in franchise operations and its distribution/retail segment. The company acknowledges macroeconomic headwinds impacting sales in the US and international markets.

Molson Coors: Shares are down approximately 6.6-6.7% after reporting lower-than-expected profits and sales in the fourth quarter. The company cites tightening consumer spending, decreasing interest in drinking among younger generations, and increased aluminum prices as contributing factors. Future strategy focuses on growing premium beer brands.

Equinox Gold: The company’s stock is reacting positively to the announcement of its inaugural dividend. Darren Hall, CEO, highlighted a significant deleveraging program, reducing net debt from $1.4 billion to under $100 million. The company anticipates continued strong cash flow and plans to fund organic growth projects, including expansion at the Valentine Project in Canada and Castle Mountain in the US. Hall acknowledged potential positive impacts from increased energy demand linked to AI growth for pipeline and oil/gas companies.

Pan American Silver: The company reported record fourth-quarter and full-year 2025 results, driven by strong production, cost control, and significantly higher silver prices (currently around $89, compared to $58 in Q4 last year). Michael Steinman, President and CEO, noted a six-year deficit in the silver market, contributing to price increases. The company forecasts a 14% rise in silver output, largely due to the acquisition of Mexican Mine. Concerns regarding security in Mexico were addressed, with the company emphasizing strong relationships with stakeholders.

Teck Resources: Earnings beat expectations at $1.5 billion, but the stock is under pressure due to a high capital budget of $3-4 billion for 2026. Craig Hutchison, Director at TD Securities, noted the importance of capital spending on projects like the Highland Valley extension and tailings management at the QB mine. He anticipates the benefits of this spending will be realized in future production growth.

Alamos Gold: Reported record free cash flow and announced a 60% increase in its dividend. John McCluskey, CEO, highlighted strong performance at the Mulatos mine and significant reserve expansion at Island Gold. The company is transitioning to underground mining at Mulatos with the development of the PDA deposit and is investing in grid power at Island Gold to mitigate weather-related disruptions.

Emerging Trends & Investment Strategies

Credit Spread Divergence: Adrienne Young, SVP at Franklin Templeton, highlighted a growing divergence in credit spreads in the US, particularly in sectors exposed to AI disruption. She anticipates this trend will spread to Canada, potentially impacting retail, banks, and insurance companies. She emphasized the importance of thorough credit analysis and a selective approach to investment.

AI Impact: The discussion consistently highlighted the impact of Artificial Intelligence (AI) on various sectors. AI is expected to drive demand for energy (benefiting pipelines and utilities) and is a key factor in the divergence of credit spreads.

Canada-US Economic Disparity: Young pointed out the differing economic trajectories of Canada and the US, with the US benefiting from rapid investment in the tech sector and Canada lagging in productivity and foreign direct investment due to uncertainty surrounding the Kuzma negotiations. This suggests a potential for the US to outperform Canada in GDP growth.

Strategic Defence Investments (MDA Space/49 North): MDA Space has created a subsidiary, 49 North, to focus on Canadian national defence priorities. This reflects a broader trend of increased defence spending and a focus on domestic capabilities. The company is positioned to benefit from this trend, particularly in areas like autonomous systems, sensors, and communications.

Technical Terms & Concepts

• Trade Deficit: When a country imports more goods and services than it exports.
• Credit Spreads: The difference in yield between two bonds, often used to assess risk. A widening spread indicates increased risk.
• Basis Points: A unit of measurement equal to 0.01% (1/100th of a percentage point).
• Free Cash Flow: Cash flow available to the company after all expenses and investments are paid.
• NCIB (Normal Course Issuer Bid): A program allowing companies to repurchase their own shares.
• Ramp Up: The process of increasing production at a mine or facility.
• Tailings Management Facility: A structure used to store the waste materials (tailings) from mining operations.
• Sovereignty: The ability of a country to govern itself without external interference.
• Depletion: The reduction in mineral reserves due to mining.

Conclusion

The trading day was marked by a mixed economic outlook and varied corporate performance. While Canada faces a record trade deficit, specific companies like MTY Food Group, Equinox Gold, and Pan American Silver demonstrated strong results. Emerging trends like the impact of AI, credit spread divergence, and increased defence spending are shaping investment strategies. A key takeaway is the importance of selective investment, thorough credit analysis, and a focus on companies positioned to benefit from long-term growth drivers. The Canadian economy's performance relative to the US remains a critical factor to watch, alongside the evolving geopolitical landscape and its impact on commodity prices.