Canadian Stocks Hold Ground As Traders Parse Economic Data

(RTTNews) - Canadian stocks traded flat on Tuesday as investors assessed the improvement in Canadian GDP against the surprise jump by third quarter U.S. GDP. These releases have altered investor expectations on the monetary decisions by the central banks of Canada and the U.S. next month.

After opening below yesterday's close, today the benchmark S&P/TSX Composite Index remained volatile until noon and inched upwards through the remaining session before closing at 32,058.73, up by 58.63 points (or 0.18%).

Six of the 11 sectors posted gains today, with the healthcare sector leading the pack.

Data released by Statistics Canada today revealed that Canadian GDP shrank by 0.3% in October. The goods sector fell 0.7%, while services contracted by 0.2%.

However, a flash estimate indicates that GDP would grow by 0.1% in November.

Last month, Statistics Canada reported 0.2% GDP growth for September.

Canada's wholesale trade rose 0.1% month-on-month to C$86.0 billion in October, beating expectations of a 0.1% drop.

Official November GDP numbers slated to be released on January 30, 2026 will provide a more clear picture.

Earlier in December, the Bank of Canada held its policy rate at 2.25%.

At the time of announcement, Bank of Canada Governor Tiff Macklem had cautioned that he expected weak fourth quarter growth.

Though inflation has stabilized near the target range of the central bank at around 2%, investors feel that the dip in GDP may compel the BoC to shift its earlier "hike" mode to a "wait-and-watch" approach.

In the U.S., Commerce Department data revealed that the U.S. economy expanded at a 4.3% annualized pace, above forecasts of 3%.

This delayed report aligns with a growing view that the U.S. economy is showing resilience even amid inflationary pressures.

The data has prompted investors to recalibrate their expectations of a rate cut by the U.S. Federal Reserve.

CME Group's FedWatch Tool is currently indicating that investors are betting on just a 13.3% chance of a quarter-point rate cut versus the above 19% seen yesterday.

The ongoing geopolitical tensions in South America and Europe have increased investor concerns.

The face-off between U.S. President Donald Trump and Venezuelan President Nicolas Maduro that began after Trump accused Maduro's regime of promoting illegal narco-trafficking that translates to an opioid crisis in the U.S. has intensified further.

After Trump ordered a total naval blockade on all "sanctioned vessels" entering or leaving the ports in Venezuela, the U.S. military has captured two big, sanctioned oil tankers off Venezuelan coast and is moving to seize another.

Trump has announced that the U.S. may keep or sell the oil in the tankers and added that the U.S. may keep the ships.

Trump's 20-point peace plan to end the Russia-Ukraine war has failed to produce the expected results despite the U.S. holding a series of talks separately with Russia and Ukraine. The delay in reaching a ceasefire is due to disagreement on "territorial concessions" by Russia and Ukraine.

Meanwhile, Prime Minister Mark Carney named Mark Wiseman as the next ambassador to the U.S. who assumes charge effective February 15.

Wiseman, a veteran in law, business, and finance will be leading the Canada-United States-Mexico Agreement review talks, which are expected to commence in January 2026.

Major sectors that gained in today's trading were Healthcare (0.74%), Energy (0.64%), Utilities (0.58%), Materials (0.29%), and Communication Services (0.22%).

Among the individual stocks, Bausch Health Companies Inc (4.58%), Nfi Group Inc (4.20%), Birchcliff Energy Ltd (4.13%), Tamarack Valley Energy Ltd (3.08%), Paramount Resources Ltd (2.63%), AltaGas Ltd (2.01%), and Ivanhoe Mines Ltd (3.11%) were the prominent gainers.

Major sectors that lost in today's trading were Industrials (0.03%), Real Estate (0.18%), Consumer Staples (0.29%), IT (0.44%), and Consumer Discretionary (0.92%).

Among the individual stocks, Air Canada (1.61%), H&R Real Estate Inv Trust (1.83%), Saputo Inc (1.05%), Dye & Durham Ltd (10.13%), and Restaurant Brands International Inc (1.83%) were the notable losers.