Canadian equities appear poised for a sluggish start on Monday as declining metal prices and increasing bond yields are anticipated to spur selling in both the materials and technology sectors. Investor sentiment might further be dampened by the uncertainty surrounding a potential interest rate cut by the Federal Reserve this month, following Friday's robust U.S. employment figures.
Enerflex Ltd. has announced that its Energy Infrastructure line and After-Market Services are projected to constitute approximately 65% of the company's gross margin, prior to depreciation and amortization. The firm forecasts that contracts within its Energy Infrastructure segment will generate around $1.5 billion in revenue over their current periods and is planning a capital expenditure of $110 million to $130 million within 2025.
In corporate developments, Barrick Gold Corporation has advised its shareholders to decline an unsolicited "mini-tender" offer by TRC Capital Investment, which pertains to about 0.29% of Barrick's common stock, stating that the offer price is below the current market value.
On Friday, the Canadian market experienced a noticeable decline, attributed to escalating bond yields and diminishing optimism regarding a potential interest rate reduction by the Federal Reserve. This sentiment shift was fueled by stronger-than-anticipated U.S. non-farm payroll growth data. Canadian employment figures also surpassed expectations, suggesting reduced likelihood for substantial monetary easing by the Bank of Canada.
Statistics Canada reported a significant employment increase, with 91,000 positions added in December 2024, the largest gain since January 2023, following a 51,000 rise in November. Concurrently, the Canadian unemployment rate declined to 6.7% in December from 6.8% the previous month.
The S&P/TSX Composite Index dropped to 24,693.75 in early trading Friday, eventually closing with a loss of 305.63 points or 1.22% at 24,767.73, marking a weekly decrease of approximately 1.1%.
Asian markets also closed weak on Monday, troubled by concerns of an ongoing pause in rate cuts by the Federal Reserve due to the stronger-than-expected U.S. payroll data. Positive trade balance figures from China failed to bolster market sentiment, while Japanese markets remained closed for a holiday.
Meanwhile, European markets are showing signs of weakness amid waning confidence in a forthcoming rate cut by the Fed this month, compounded by rising bond yields and unease about economic growth projections.
In the commodities market, West Texas Intermediate crude oil futures have risen $1.58 or 2.06%, settling at $78.15 per barrel. Conversely, gold futures have declined by $31.40 or 1.16%, pricing at $2,683.60 per ounce, and silver futures have decreased by $1.034 or 3.3%, trading at $30.280 per ounce.
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