Trading Day for Wednesday, Dec. 24, 2025

Key Concepts

Market Performance: TSX, S&P 500, NASDAQ performance on Christmas Eve, including point changes and percentage gains.
Canadian Manufacturing: Decline in Canadian factory activity, specifically manufacturing shipments in November, and contributing factors.
BP & Castrol: BP’s sale of a majority stake in Castrol Lubricants to Stonepeak Partners and the strategic shift behind the sale.
S&P 500 Outlook (2025): Analysis of S&P 500 performance in 2024 and predictions for 2025, including potential rate cuts and sector performance.
Investment Strategy: The strategy of buying winners after an up year, based on historical market data.
Trade Policies & China: Impact of Trump’s trade policies on Chinese manufacturers and their responses, including shifting production.
Canadian Labour Unrest (2024): Overview of major strikes across Canada (Air Canada, Canada Post, Alberta Teachers) and the underlying causes.
Canada Post Situation: The tentative agreement between Canada Post and its union, and the ongoing challenges facing the crown corporation.

Market Close – December 24th

The trading day closed early on December 24th due to the upcoming Christmas holiday. The Toronto Stock Exchange (TSX) closed down 58.86 points, failing to reach a new record high after several previous record closes. The S&P 500 saw a modest gain of 22 points (0.5%), while the NASDAQ experienced a 51-point increase (0.2%).

Top Movers (TSX):

Celestica: Up 1.7% ($7.11 gain), closing at $42.88.
CargoJet: Up 1.6%, closing at $85.35 (down 18% year-over-year).
Brookfield Business Partners: Up over 2% ($1 gain), closing at $49.72 (up 54% year-over-year).
Perpetua Resources: Down 4.3% ($1.64 loss), despite being up 137% on the year.
Seabridge Gold: Down 2.6%, closing at $42.28 (up 150% on the year).
G Mining Ventures: Down 2.3% ($1.02 loss).

Economic Data & News

Canadian Manufacturing Decline: Statscan’s flash estimate indicates a 1.1% decline in Canadian manufacturing shipments in November, following a 1% drop in October. Decreases were particularly pronounced in transportation equipment, food, chemicals, and wood products.

BP & Castrol Sale: BP has agreed to sell a 65% stake in its Castrol Lubricants division to Stonepeak Partners for approximately $6 billion USD. This move is part of BP’s strategy to reduce debt and refocus on its core oil and gas business, having previously scaled back its renewable energy investments.

S&P 500 Outlook & Investment Strategy (with Sam Stovall, CFR Research)

Sam Stovall, Chief Investment Strategist at CFR Research, discussed the S&P 500’s performance and outlook for 2025. The S&P 500 is up over 17% this year and could potentially exceed 20% by year-end, marking a third consecutive year of double-digit gains.

Key Points:

Rate Cuts: Stovall anticipates two rate cuts by the Federal Reserve in 2026, one in the first half and one in the second. The timing of the first cut has been pushed back to potentially April due to strong GDP data. The cuts are contingent on core PCE inflation falling to 2.2% and unemployment hovering around 4.5%.
Historical Performance: Historically, buying winners after an up year has yielded a 300 basis point outperformance over the market 71% of the time since 1990.
2025 Target: Stovall predicts a year-end target of 7400 for the S&P 500, representing a mid-to-high single-digit percentage gain.
Sector Preferences: Stovall favors Communication Services, Information Technology, and Industrials. He also sees potential in Financials. He anticipates approximately 14% earnings growth for the S&P 500 in 2026 and nearly 15% in 2027, with most sectors expected to show double-digit gains.
Stock Picks:
- GE: Positioned to benefit from reshoring trends and rising electricity demand (data centers, AI, manufacturing).
- Lam Research: Beneficiary of increasing chip and package complexity, offering persistent storage.
- Alphabet (Google): Attractive valuation, free cash flow potential, and anticipated revenue growth of 11-14% through 2027, driven by AI and cloud prospects.

Quote: “If something is doing well, it usually ends up continuing to do well into the coming year.” – Sam Stovall

Impact of Trump’s Trade Policies on China

A Bloomberg documentary explored the impact of Trump’s trade policies on Chinese manufacturers. The policies created significant uncertainty, forcing companies to adapt and consider new markets.

Key Findings:

Uncertainty & Adaptation: Chinese manufacturers are operating in a high-risk environment, focusing on short-term survival rather than long-term planning.
Shifting Production: While some companies are exploring “China plus one” strategies (diversifying production to countries like India and Southeast Asia), a large-scale shift of manufacturing back to the US is unlikely.
US Consumer Importance: Replacing the US consumer market is proving difficult.
Tariff Impact: Tariffs have increased costs and disrupted supply chains.
Quote: “Americans don't want to make spatulas. They want to eat hamburgers. And I don't mean that in a negative way. I want to eat hamburgers, too. But I'm here in China making the spatulas to do it. Americans don't want these jobs.” – Comment from a manufacturer.
Trade Imbalance: In 2024, the US imported nearly $439 billion worth of goods from China, while exports to China totalled just over $143 billion, resulting in a trade deficit of approximately $295 billion.

Canadian Labour Unrest (2024)

2024 saw significant labour unrest across Canada, with major strikes impacting various sectors.

Key Strikes:

Air Canada Flight Attendants: Three-day strike over wages and working conditions.
Canada Post Workers: Two-week nationwide strike over wages, benefits, and delivery models.
Alberta Teachers: Strike over wages, support, and classroom sizes, ultimately curtailed by the government invoking the notwithstanding clause.

Underlying Causes:

Built-up Frustration: Years of stagnant wages and deteriorating working conditions.
Inflation & Cost of Living: Increased financial pressures on workers.
Shifting Worker Expectations: A desire for better compensation and improved work-life balance.

Quote: “Workers engage in this kind of labour activism when they’ve been pushed too far, when they’re fed up, and so they start to push back.” – Expert commentary.

Canada Post & Future Challenges

The tentative agreement between Canada Post and its union provides some short-term stability, but the crown corporation faces ongoing structural challenges.

Key Points:

Tentative Agreement: Includes wage increases, enhanced benefits, and a new weekend parcel delivery model.
Financial Difficulties: Canada Post continues to experience significant financial losses.
Need for Modernization: The corporation needs to become more dynamic, productive, and competitive.
Impact on Businesses: The recent disruptions have forced some businesses to seek alternative shipping options.

Conclusion

The closing of markets on December 24th marked the end of a year characterized by economic fluctuations, geopolitical tensions, and significant labour unrest. While markets showed resilience, challenges remain, particularly regarding trade policies, manufacturing competitiveness, and the evolving needs of the Canadian workforce. The outlook for 2025 suggests continued volatility and the need for strategic adaptation by both businesses and policymakers.