FX.co ★ Canadian Market Remains Weak Despite Coming Off Early Lows

The Canadian stock market initially experienced a steep decline of nearly 800 points, or over 3%, early on Monday. Despite a partial recovery, the market remains decidedly negative, with significant downward pressure affecting stocks in the industrial, consumer discretionary, and financial sectors.

As of the latest update, the index had decreased by 213.44 points, representing a 0.84% decline, sitting at 25,319.66.

The market's opening saw considerable losses, exacerbated by the Trump administration's decision to implement 25% tariffs on Canadian imports starting February 1. Energy imports were exempt, instead facing a 10% tariff.

Following the executive order from U.S. President Donald Trump, which imposed 25% tariffs on nearly all goods imported from Canada, outgoing Prime Minister Justin Trudeau announced that Canada would retaliate with similar tariffs on over $105 billion worth of U.S. goods.

President Trump also hinted that the European Union and the United Kingdom could be subsequent targets for similar levies.

In response, Canada and Mexico have planned retaliatory tariffs on American products, while China has pledged countermeasures. The implementation of tariffs on Mexican goods has been delayed by one month after President Trump’s discussions with Mexico's President. The European Union has also issued a strong warning regarding potential retaliation if targeted.

Notable companies experiencing significant declines, ranging from 4% to 8.5%, include Goeasy (GSY.TO), BRP Inc (DOO.TO), Magna International (MG.TO), Ag Growth International (AFN.TO), Cargojet (CJT.TO), Linamar Corporation (LNR.TO), Canadian Imperial Bank of Commerce (CM.TO), Canadian National Railway (CNR.TO), Canadian Pacific Kansas City (CP.TO), CCL Industries (CCL.A.TO), and Precision Drilling Corporation (PD.TO).

Other companies such as Bank of Nova Scotia (BNS.TO), TFI International (TFII.TO), EQB Inc (EQB.TO), Premium Brands Holdings (PBH.TO), Royal Bank of Canada (RY.TO), MTY Food Group (MTY.TO), Cameco Corporation (CCO.TO), Aritzia Inc (ATZ.TO), and Bombardier Inc (BBD.B.TO) are also down by 2% to 4%.

Conversely, metal stocks have risen as gold prices surged due to increased demand for safe-haven assets. Equinox Gold Corp (EQX.TO) notably jumped 10%. Other gainers include SilverCrest Metals (SIL.TO), Iamgold Corporation (IMG.TO), Pan American Silver Corp (PAAS.TO), Alamos Gold (AGI.TO), Aura Minerals (ORA.TO), Wesdome Gold Mines (WDO.TO), and Torex Gold Resources (TXG.TO), which have all increased by 3% to 6%.

On the economic front, the S&P Global Canada Manufacturing PMI report indicated a decline to 51.6 in January from 52.2 the previous month, pointing to a slower rate of economic expansion. This marks the fifth consecutive month of decline in this metric.