Good morning, and a belated happy new year. Today, we’ll be looking at the earnings, events and other stories on our radar this week — including Aritzia Inc.’s full-court press into the United States and the Consumer Electronics Show in Las Vegas, where tariffs might overshadow artificial intelligence. But first:
In the news
Justin Trudeau is expected to step down as Liberal Party Leader as early as today, The Globe and Mail’s Marieke Walsh and Robert Fife report. Two weeks out from the inauguration of Donald Trump as U.S. president, it’s unclear whether Trudeau will stay on until another leader is chosen.
“Survival jobs” are a growing necessity for newcomers to Canada, causing long-lasting income issues as they get caught in a cycle of overqualification.
A Barrick site in Tanzania has become an ‘armed encampment,’ the company says.
Too high? Shareholders are pushing back against executive pay at some of Canada’s largest cannabis companies.
Shoppers wait in line on Black Friday to enter a new Aritzia store in Chicago.Getty Images
In focus
On our radar this week
The first full trading week of 2025 brings key Canadian and U.S. economic data and earnings from two Canadian companies at the centre of recent investor attention.
1. This week offers a glimpse of the year ahead: Markets seem to have come to terms with the return of Donald Trump as U.S. president and what he means for this year’s outlook. Which is to say: bigly to the moon! But everything that happens ahead of his inauguration on Jan. 20 will nevertheless be sprinkled with unease over the U.S. interest rate outlook and the potential for policy surprises announced via late-night social-media posts. Who knows, we may get one soon about Trudeau, who he has called “meek, mild and dishonest.”
» In the U.S., investors are locked on the Jan. 10 report of December non-farm payrolls, which is forecast to show a rise of 150,000, versus November’s 227,000 jump.
- The data could clarify the Federal Reserve’s interest rate plans after the central bank last month rattled markets by reducing its projected rate cuts for 2025, but it has already signalled it would likely hit pause on cutting at its next meeting later this month.
- But markets are still “looking for that Goldilocks number – neither too hot, nor too cold,” Angelo Kourkafas, senior investment strategist at Edward Jones, told Reuters. A lower-than-expected report could bring volatility; a stronger readout could bring fears of inflation dragging on an otherwise optimistic equities outlook for the year.
» In China, December trade and inflation figures at the end of the week will provide a sense of how the world’s second-largest economy closed out 2024.
2. Exporters ship as the tariff clock ticks down: The new year kicked off with what looked like good news for Canada’s beleaguered manufacturing sector. Manufacturing activity expanded in December at the fastest pace in nearly two years.
But looks can be deceiving, The Globe and Mail’s Jason Kirby writes. The prospect of punishing U.S. tariffs on imports from Canada appears to be propelling growth.
On Tuesday, Statistics Canada reports November’s merchandise trade balance, which measures the value of imported and exported goods, and the difference between them.
Exports edged up in October, but Trump’s promised 25 per-cent tariffs on imports has spurred some exporters into rushing inventory across the border ahead of inauguration day on Jan. 20. November’s exports might show an uptick in growth as U.S. clients also aim to stockpile inventories before the tariffs kick in. But it’s more likely that effect won’t show up until December or January, Bank of Montreal senior economist Sal Guatieri said in an e-mail.
3. A front-row view on Aritzia’s U.S. growth hopes: The Vancouver-based fashion retailer reports earnings for its fiscal third quarter to the end of last November as it continues its push into the U.S. market.
The brand enters the new year with a new three-floor flagship shop in New York’s SoHo district as it aims to boost awareness among U.S. shoppers of its oft-duped “sub-luxury” products – which could prove to be a valuable proposition to cost-conscious consumers.
Aritzia’s business has become a “tale of two consumers,” Susan Krashinsky Robertson wrote in The Globe about the company’s second quarter, as demand slowed in Canada while American clients fuelled its growth.
“It’s almost like a mindset and a lifestyle, in terms of what our offering is.”
— Aritzia CEO Jennifer Wong
In Canada, shopping habits remained “consistent,” Wong said, nudging sales up almost 6 per cent over the second quarter. But that’s compared with a 24-per-cent increase in the U.S. Aritzia chief executive Jennifer Wong told analysts the company has seen growth in the U.S. from new store openings, accelerating e-commerce sales and strong performance of existing boutiques. “It’s almost like a mindset and a lifestyle, in terms of what our offering is,” Wong told Vogue. “And I think you’ll find that in every city.”
4. A Corus of concerns: Corus Entertainment Inc.’s quarterly report on Thursday will bring fresh scrutiny to the media company’s plans to stay solvent.
- The Toronto-based company laid off more than 800 people last year and has seen its shares plummet in recent months as it grappled with lost revenue and concerns over its debt. Investors wonder if the company can pay down more than $1-billion by 2030.
- Most of the company’s debt is due for repayment within the next few years, with $290-million in bank debt set to reach maturity in 2027 and $500-million in bonds due the following year.
- The company was already struggling to make money when it was informed last year that Warner Bros. Discovery Inc. would not renew the company’s Canadian rights to five popular specialty channels – including HGTV and Food Network – at the end of 2024.
Corus revealed last month in its annual proxy statement to shareholders that it paid $1.8-million bonuses to five top executives, owing to the company reaching its free-cash-flow goals and individual performance, The Globe’s David Milstead and Jameson Berkow reported.
5. The future of technology under a familiar cloud
The Consumer Electronics Show has a packed schedule of major keynotes and potential reveals, kicking off tonight with a speech from leather jacket enthusiast and Nvidia Corp. CEO Jensen Huang. Over the next few days, exhibitors and business leaders will introduce new ideas and products largely tied to artificial intelligence: the future of beauty and fashion; the future of health; the future of gaming; the future of retail; the future of robots, drones, driving and data.
Six-time NBA all-star Blake Griffin is there.
Hanging above the four-day event, however, is the inescapable talk of tariffs. For all of the exciting, provocative ideas and new technologies, the threat of Trump moving ahead with punitive tariffs on global imports into the U.S. renders almost everything else abstract – and not just stuff that was abstract already. Top of mind for business leaders this week will be burning issues such as moving production to the U.S., changing suppliers, cost adjustments and more. That probably isn’t the kind of disruption organizers were hoping to highlight.
A photograph from the 1981 press kit for the new CD player.Sony;Philips/Supplied
A brief history of CES reveals
1981: Sony and Philips jointly introduce the CD player, calling it “The Phonograph Record of the Future.” And it was! For a time.
1985: Nintendo Co. Ltd. unveils the Nintendo Entertainment System.
1998: The emerging technology of DVDs takes centre stage.
2008: Bill Gates announces he’s scaling back to a part-time job at Microsoft Corp.
2020: Innovations in the auto sector become a focal point. Electric vehicles, infotainment, telematics, autonomous capabilities and ride hailing converge with the rise of artificial intelligence.
Bookmarked
On our reading list
MAGA vs. Musk: The Republican party is already divided between traditionalists and MAGA supporters. Now, MAGA is splintering over Trump’s pick as his AI adviser, Konrad Yakabuski writes.
The Shopify Story: An excerpt from a new book tracking the startup’s trajectory to e-commerce giant.
On the Decibel: Who stole half-a-million dollars worth of cheese?
Morning update
Global markets were mixed ahead of a data-packed week that will be pivotal in setting expectations for interest rates. Wall Street futures were in positive territory following a broad rally Friday, while TSX futures followed sentiment higher as crude prices climbed.
Overseas, the pan-European STOXX 600 was up 0.71 per cent in morning trading. Britain’s FTSE 100 gained 0.06 per cent, Germany’s DAX rose 1.28 per cent and France’s CAC 40 climbed 1.81 per cent.
In Asia, Japan’s Nikkei closed 1.47 per cent lower, while Hong Kong’s Hang Seng fell 0.36 per cent.
The Canadian dollar traded at 69.84 U.S. cents.