While we dig ourselves out of the most recent snow dump, markets will be digging out of a metaphorical dump of mega-cap tech earnings, central bank decisions, and of course, tariffs. Read all about it in my weekly preview in the Globe and Mail.
Here are five things to know today:
The boy who cried tariffs: Futures are flat seemingly unfazed by US President Donald Trump’s threat to put a 100% tariff on Canadian goods. Gold, on the other hand, is watching every move out of Washington and crossed $5,000/oz for the first time ever while silver also reaches new records. In case you missed it, Trump posted on Saturday that if Canada does a deal with China he would put 100% on all Canadian goods. Less than two weeks ago Trump said it was a good idea for Canada to make a deal with China. What changed? Likely *that* speech at Davos. The post also ignores the fact that there is no trade deal with China, rather it is basically an agreement to exchange canola for some EVs. Markets could be taking their signal from US Treasury Secretary Scott Bessent who went on the Sunday shows to water down the threat of tariffs saying it would be implemented on if Canada did a broader deal with China. Prime Minister Mark Carney pointed out that is not possible without giving the US a 30-day warning in the current free trade agreement with the US. “In conclusion, the thing about threats is that they have to be remotely credible.,” wrote Scotia’s Derek Holt, “Nevertheless, instability only adds to the case to diversify away from the US.” Holt made that reference in relation to trade, but that is also true of markets with the US Dollar plunging for a third day in a row to a four-month low. Canadian markets are indicated higher with gold helping the miners and energy stocks like CNQ, Suncor and Cenovus all in the green in the pre-market.
Japanophile: Part of the reason the US Dollar is under pressure is because the Yen is soaring after the Prime Minister warned the country could take action to support the currency. In addition, the US signaled it would also be willing to support interventions as it is clear that a lower US dollar would be in their interest as they reshore manufacturing. While a lower Yen benefits Japan’s manufacturers, it also imports inflation and right now that is a key concern for the Bank of Japan which has been going against the grain raising rates. Investors are closely watching Japan’s ability to keep its currency and its bond market under control ahead of a snap election in February.
Golden handshake: Allied Gold agreed to a takeover offer by China’s Zijin Mining in a $5.5 billion deal amidst record high gold prices. The Canadian based miner with assets in Africa agreed to the $44/share offer, which is just a 5% premium to its most recent close. If I were a shareholder I might think we could do better on our own given the gold price environment. But I’m not so its not my fight. Allied says the deal is a 27% premium to the 30-day average price. Gold itself is up 10% just in the last 30 days. The all-cash deal is expected to close by late April. It is a quick exit for long-time gold executive Peter Marrone who has been the CEO since 2023 when Allied went public through a SPAC. He was also the founder and CEO of Yamana Gold which was bought by Pan American Silver and Agnico Eagle in 2023.
Notable calls: Bombardier has been downgraded to Sell at Goldman Sachs. Goldman’s Noah Poponak is doubling down on his bearish view despite the stock tripling over the past year. Poponak notes that the company’s backlog for business jets is growing slower than peers and warns that will weigh on sales growth. Poponak uses the stock rally against the company saying it creates a “higher bar for performance.” CES Energy Solutions is catching a downgrade from TD Cowen. This is merely about valuation with more positives than negatives mentioned in the note. “After a strong run (+55% in the last 12 months), CES’ shares are now trading at a 2026E EV/EBITDA multiple of 7.8x, a significant premium to the peer average of 5.0x,” wrote TD’s Aaron MacNeil. Scotia is upgrading lumber stocks with Interfor moved to Buy and Canfor moved to Neutral. The analyst, Ben Isaacson, says the group trades at 20-40% below fair value that is typical at the middle of a cycle. He expects a rally in the spring.
Snowmageddon: The record snowfall and cold snap across the north east has helped natural gas which is trading at the highest level since 2022. This hasn’t help natural gas stocks much though, most of which have lagged the move in the commodity reflecting a disbelief that the rally will hold once weather has settled down. Airlines will likely take a hit with the number of cancellations the highest since the pandemic. The weather made it difficult to go shopping which may show up in retail sales although I noticed that we still got a few Amazon packages yesterday! 
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