Canadian Shares Set to Rise Amid Steady Crude, Gold Prices

Canadian shares are anticipated to open higher despite political uncertainty from Trudeau's resignation and tariff threats from Trump. The markets may see limited upside due to these concerns, as outlined in this analysis.

Date: 07-01-2025

AI Rating: 6

Market Sentiment and Political Factors
The report highlights key factors influencing Canadian shares, including political uncertainty surrounding the resignation of Prime Minister Justin Trudeau and tariff hike threats from U.S. President-elect Donald Trump. This combination of events may dampen market optimism, despite steady commodity prices.

Trade Deficit Improvement
Canada saw a reduction in its trade deficit to C$ 0.92 billion in October from C$ 1.26 billion in September. The increase in exports by 1.1% to C$ 64.22 billion is a positive sign of economic activity, although the slight rise in imports by 0.5% to C$ 65.14 billion suggests ongoing demand for foreign goods. This improvement in trade could positively reflect on the economy, providing a boost to investor confidence.

Purchasing Managers Index (PMI)
The rise of the Ivey Purchasing Managers Index to 52.3 in November from 52 in October indicates a slight expansion in business activity. A PMI reading above 50 suggests growth in the manufacturing sector. This data could be perceived positively by investors as it may suggest stabilization in economic growth.

Commodity Performance
The report mentions that crude oil and gold prices have remained steady, with West Texas Intermediate Crude oil futures increasing by 0.65% and gold futures up by 0.57%. Such stability in key commodities might have a favorable effect on the performance of resource-related companies within the Canadian market. A stronger commodity market generally supports the Canadian economy, as it relies heavily on natural resources.

Stocks: GFL.TO