Markets today: Indexes slide after U.S. jobs data, bullish fund managers, a concentration concern and more

12/16/25 11:21

TSX continues its slide as energy stocks drop with oil prices

– Reuters

Canada’s main stock index dipped for the third successive session on Tuesday, as heavyweight energy stocks followed oil prices lower.

At 11:19 a.m. ET, the S&P/TSX Composite index was down 144.46 points, or 0.46 per cent, at 31,338.98, and was set for its lowest close in a week.

Canada’s energy sector tumbled 3 per cent as oil prices sank below US$60 after prospects of a Russia-Ukraine peace deal appeared to strengthen.

Meanwhile, shares of cannabis firms Canopy Growth (WEED-T), Trulieve Cannabis (TRUL-CN) and Curaleaf Holdings (CURA-T) rose between 4.8 per cent and 9.3 per cent, extending their recent gains, after U.S. President Donald Trump said on Monday he is considering an executive order to reclassify marijuana as a less dangerous drug.

U.S. stocks were lower on Tuesday after data showed jobs growth rebounded in November, but the unemployment rate stood at 4.6 per cent.

Canada’s retail sales data for October is due later this week. The Bank of Canada held its key policy rate steady last week as widely expected, and Governor Tiff Macklem said the economy was proving resilient overall to the effect of U.S. trade measures.

Macklem is set to speak later in the day.

“It’s just going to be a data-driven market for a little while,” said Ian Chong, portfolio manager at First Avenue Investment Counsel Inc.

After a strong year, doubts about valuation could prompt investors book profits, he said.

12/16/25 11:09

Here’s good reason to worry about market concentration

– Scott Barlow

Wells Fargo global investment strategist Douglas Beath explains why it’s completely reasonable to be worried about market concentration in AI-related stocks,

“1 .The world’s largest company and Al bellwether has a market capitalization higher than the Energy, Materials, and Real Estate sectors combined (in addition to the Utilities sector as of this writing). The Magnificent 7 (Mag 7; a group of 7 stocks (Tesla, Apple, Microsoft, Alphabet, Meta, Amazon, and Nvidia) weighting reached an all-time high of 36 per cent of the S&P 500 Index in November. As of November 30, the S&P 500 Information Technology sector accounts for 34 per cent of the S&P 500 Index market-cap weight — slightly higher than its share at the peak of the dot.com bubble in 2000.

“2. Earnings concentration: The two dominant sectors related to the Al theme (Information Technology and Communication Services) have accounted for 27.4 per cent and 10.6 per cent of S&P 500 earnings to date this year through November 30. According to Ned Davis Research, they are projected to account for 21.3 per cent and 9.5 per cent in 2026, respectively.

“3. Performance. Since ChatGPT was released on November 30,2022, the three-year total return through November 30,2025 for Al-related stocks has dominated that of the benchmark S&P 500 Index

• Largest Al stock: 946 per cent
• Mag 7: 275 per cent
• S&P 500 Information Technology sector: 146 per cent
• S&P 500 Index: 74 per cent”

Mr. Beath is predicting a widening of market leadership. He notes that the S&P 500 equal weight index is closing in on an all-time high and the number of stocks above their 50 day moving average is steadily increasing. Only two of the Magnificent seven stocks outperformed the index year-to-date to Nov. 30.

12/16/25 10:59

Pfizer foresees challenging 2026 on fading COVID sales, margin pressure

– Reuters

Pfizer’s (PFE-N) profits will fall short of Wall Street estimates next year, as it faces weaker sales of COVID products and squeezed margins stemming from its deal with the U.S. government to lower prescription drug costs.

The stock fell nearly 5 per cent in Tuesday trading. Pfizer shares have dropped more than 50 per cent since early 2023 as demand for COVID vaccines and treatments waned, leaving the company trailing peers in performance.

The drugmaker does not expect to return to growth until 2029, facing looming generic competition on several older medicines set to lose patent protection in coming years.

Its pipeline has not produced a game-changing drug since it helped to develop COVID vaccine Comirnaty and produced COVID treatment Paxlovid. The company is working to save more than US$7-billion annually through 2027 as it tries to control costs.

The drugmaker expects 2026 adjusted profit per share to be between US$2.80 and US$3, below analysts’ average estimate of US$3.05 per share, according to data compiled by LSEG.

12/16/25 10:34

Wall Street flat as healthcare losses offset tech gains; focus on jobs data

– Reuters

Open this photo in gallery:

Traders work on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York on Dec. 16.CHARLY TRIBALLEAU/AFP/Getty Images

Wall Street’s main indexes were little changed in volatile trading on Tuesday as healthcare and energy stocks led losses, while investors assessed a jobs report that signaled a cooling labor market and kept hopes for future interest rate cuts alive.

A Labor Department report showed U.S. job growth rebounded in November after nonfarm payrolls declined in October because of government spending cuts.

But the unemployment rate was at 4.6 per cent in November as the labor market weakened against the backdrop of economic uncertainty stemming from President Donald Trump’s aggressive trade policy.

The data offered clarity on the state of the labor market after a recent historic government shutdown deprived both investors and the Federal Reserve of official figures. Policymakers broadly acknowledged signs of a weakening jobs market when the central bank lowered rates last week.

“When the unemployment rate moves up like this, it does fuel the potential for continued rate cuts. But as we’ve seen in the past, this is not a consistent trend,” said Peter Andersen, founder of Andersen Capital Management.

Investors raised expectations for rate cuts next year, according to data compiled by LSEG, and are now pricing in at least 58 basis points of reductions, higher than the 25 bps signaled by the central bank last week.

A separate survey showed U.S. business activity growth hit a six-month low in December.

Meanwhile, White House economic adviser Kevin Hassett, also one of Trump’s top contenders for the Fed chair post, said the central bank’s independence was important, amid concerns he might be too close to the president.

The Dow Jones Industrial Average fell 9.66 points, or 0.02 per cent, to 48,406.44. The S&P 500 lost 1.97 points, or 0.03 per cent, to 6,814.54, while the Nasdaq Composite gained 33.47 points, or 0.15 per cent, to 23,090.89.

The S&P 500 and the Nasdaq hovered near their three-week lows as persistent uncertainty over rate cuts and concerns about lofty tech valuations continued to weigh on investor sentiment.

12/16/25 09:33

North American indexes slip at open as investors assess key U.S. jobs data

– Reuters

North America’s main indexes slipped at the open on Tuesday after data broadly signaled a cooling U.S. economy, paving the way for more monetary policy easing by the Federal Reserve next year.

The Dow Jones Industrial Average fell 36.4 points, or 0.08 per cent, to 48,380.17 at the open. The S&P 500 fell 16.4 points, or 0.24 per cent, to 6,800.12​, while the Nasdaq Composite dropped 75.6 points, or 0.33 per cent, to 22,981.819.

At 9:31 a.m. ET, Toronto’s S&P/TSX composite index was down 0.3 per cent at 31,399.073 points.

The U.S. unemployment rate was at 4.6 per cent in November as the labor market weakened against the backdrop of economic uncertainty stemming from President Donald Trump’s aggressive trade policy.

“When the unemployment rate moves up like this, it does fuel the potential for continued rate cuts. But as we’ve seen in the past, this is not a consistent trend,” said Peter Andersen, founder of Andersen Capital Management.

The data offered investors greater clarity on the state of the labor market after a recent historic government shutdown deprived both investors and the Federal Reserve of official figures. Policymakers broadly acknowledged signs of a weakening jobs market when the central bank lowered interest rates last week.

Investors raised expectations for rate cuts next year, according to data compiled by LSEG, and are now pricing in at least 58 basis points of reductions, higher than the 25 bps signaled by the central bank last week.

On the inflation front, average earnings rose by a less-than-expected 0.1 per cent on a monthly basis, while a separate delayed report showed retail sales in October were unchanged.

12/16/25 08:51

U.S. retail sales unexpectedly unchanged in October

– Reuters

U.S. retail sales were unexpectedly flat in October, though consumer spending appears to have remained on a solid footing at the start of the fourth quarter despite the rising cost of living that is forcing some households to scale back.

The unchanged reading in retail sales reported by the Commerce Department’s Census Bureau on Tuesday followed a downwardly revised 0.1-per-cent gain in September. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, edging up 0.1 per cent after a previously reported 0.2-per-cent rise in September.

The report, originally due in mid-November, was delayed by the 43-day shutdown of the government. Americans are facing higher prices for food, furniture and a range of other imported goods, the result of President Donald Trump’s sweeping import duties. Healthcare and housing costs have also surged.

Economists say lower- and middle-income households have been disproportionately impacted by the soaring cost of living. Trump, who last year swept to election victory on promises to tame inflation, has in recent weeks alternated between dismissing affordability problems as a hoax, blaming former President Joe Biden, and promising his economic policies will benefit Americans next year.

12/16/25 08:31

U.S. stock futures turn positive after jobs data

– Reuters

U.S. stock index futures turned positive on Tuesday, as investors assessed a long-delayed jobs report and prospects of interest rate cuts by the Federal Reserve.

A Labor Department report showed nonfarm payrolls increased 64,000 in November, compared with an estimated 50,000 rise, according to economists polled by Reuters.

The unemployment rate stood at 4.6 per cent, compared with estimates of 4.4 per cent. Year-on-year average earnings came in at 3.5 per cent versus estimates of 3.6 per cent.

A separate reading from the Commerce Department also showed retail sales for October were flat, compared with an estimate of a 0.1 per cent increase.

At 8:31 a.m., Dow E-minis were up 70 points, or 0.14 per cent, S&P 500 E-minis were up 8.5 points, or 0.12 per cent and Nasdaq 100 E-minis were up 32.25 points, or 0.13 per cent.

12/16/25 08:31

U.S. job growth beats expectations in November; unemployment rate at 4.6 per cent

– Reuters

 U.S. job growth rebounded in November after nonfarm payrolls declined in October because of government spending cuts, but the unemployment rate was at 4.6 per cent as the labour market weakens against the backdrop of economic uncertainty stemming from President Donald Trump’s aggressive trade policy.

The delayed employment report for November and a partial update for October published by the Labor Department’s Bureau of Labor Statistics on Tuesday did not include the unemployment rate and other metrics for October after the 43-day shutdown of the government prevented the collection of data from households.

Nonfarm payrolls increased by 64,000 jobs last month, the BLS said. The economy shed 105,000 jobs in October, reflecting the departure of more than 150,000 federal employees who took deferred buyouts as part of the Trump administration’s push to shrink the government’s footprint. Most of them dropped off government payrolls at the end of September.

Payrolls were not impacted by the furloughing of workers during the longest shutdown in history as they were retroactively paid when the government reopened.

The unemployment rate was at 4.4 per cent in September. The BLS made changes to weights for labor force estimates because no data was collected in October.

12/16/25 07:40

Stubbornly high grocery prices skewing CPI results

– Scott Barlow

BMO chief economist Doug Porter highlighted climbing food costs,

“For the past two years, much of the affordability discussion in Canada has centred around the cost of housing. The good news on that front is that home prices continue to drift down nationally, market rents are easing, and of course interest rates have come down heavily since spring 2024. Housing affordability is not yet back to ‘normal’, but it’s moving into the same hemisphere. Accordingly, the shelter component of the CPI is calming quickly—it’s almost all the way down to 2 per cent year-over-year, and looks to moderate further. Alas, the main villain of the inflation episode of 2021-23 has come roaring back onto the scene—food costs. Grocery inflation has been slowly building over the past year, after holding almost steady in 2024. But November saw a large monthly rise across many categories, and groceries are now up a meaty 4.7 per cent year-over-year. That’s a big deal for monetary policy, as food prices are a key driver of inflation expectations”

12/16/25 07:33

Global fund managers getting dangerously bullish

– Scott Barlow

Open this photo in gallery:

A board above the trading floor of the New York Stock Exchange displays the closing number for the Dow Jones industrial average, Thursday, Dec. 11, 2025.Richard Drew/The Associated Press

BofA Securities investment strategist Michael Hartnett compiled the results of his monthly survey of global fund managers with his usual punchy writing style,

“Most bullish FMS [fund manager survey] of past 3½ years, macro optimism highest since Aug’21 on ‘run-it-hot’ belief, allocation to stocks+commodities highest since Feb’22, cash level at record-low 3.3 per cent (down from 3.7 per cent); Dec FMS pushes BofA Bull & Bear Indicator up to 7.9, v close to ‘sell signal’; bullish positioning remains biggest headwind for risk assets.

“On Macro & Policy: profit expectations (net 29 per cent) highest since Aug’21 as 57 per cent predict macro soft landing, 37 per cent say no landing and record-low 3 per cent say hard landing; liquidity conditions rated 3rd best of past 17 years as most investors since Apr’22 predict higher bond yields, 69 per cent of investors expect Kevin Hassett to be the next Fed Chairman.

“On Crowds & Risks: AI bubble (37 per cent) = biggest tail risk; most likely source of credit event = private credit (40 per cent) & hyperscaler capex (29 per cent); long Magnificent 7 (54 per cent) & long gold (29 per cent) = most crowded trades.

“On AA: investors most OW [overweight] stocks since Dec’24, most UW bonds since Oct’22.”

12/16/25 07:28

Citi strategist picks the 12 most important market trends for 2026

– Scott Barlow

Citi strategist Adam Pickett compiled what he believes will be the 12 most important market themes in 2026,

“#1 AI Everywhere, All the time — We see the AI bubble likely building further in 2026. The big sector rotation happens after the bubble peaks, not before. While diversification is likely still helpful next year, tech should be part of the longs …

#2 Sector rotation around reflation — It will not be only about AI in 2026. We think cyclicals can do well in a reflating economy, as shown by our regime work …

#3 Election cycles into the midterms — Midterm election years are typically subpar for both bonds and equities. Downside in equity markets typically occurs in Q3 and is more likely when the incumbent party keeps control.

#4 Global cyclical strength — We see long copper as a clean expression of global cyclical strength, and is an all-weather trade, somewhat independent of US growth developments.

#5: Fading central bank pricing — The average length between the last cut and first hike may be shorter than recent history suggests …

#6 IEEPA and trade concerns – We await the IEEPA decision. The overhang of USMCA renegotiations will keep the BoC from moving quickly …

#7 ‘Tis the season for more spending —We think the European continent offers some opportunities on fiscal, monetary and political divergence, particularly in UK and France …

#8 Trading a new Fed Chair — We see the new Fed Chair as a cap on hikes, rather than a turbo-dove base case, and are skeptical of Fed independence fears. We see the run-it-hot stance as an H2 risk to term premia and inflation expectations (both higher).

#9 FX – divergence and USD correlations — We see a year of three thirds for the USD: weaker Q1, stronger summer, weaker again Q4. USD correlations fall as we move into the ‘recovery’ regime, so we sell USD correlations in dual digitals to leverage up our pro-cyclical view.

#10 AI power demand crowding – Chinese aluminium production capacity is capped by policy tradeoffs on power usage and the environment. Power pricing more in-line with datacenter costs can add more than $1,000/t to aluminium production costs and will filter through to prices.

#11 Long Equity vs Credit – Equities and credit have become increasingly interconnected. The distribution of possible outcomes from the AI boom is likely to be skewed negatively for credit relative to equities.

#12 Europe energy rotation – We see strong micro and macro fundamentals for European carbon credits next year, and risks of an imminent EU intervention may be overstated.”

12/16/25 07:11

Tuesday’s analyst upgrades and downgrades

– David Leeder

National Bank Financial analyst Richard Tse sees “more risks” for Canada’s technology sector heading into 2026 than a year ago, believing “uncertainty around AI’s potential disruption … won’t abate until there’s short-term proof one way or the other around the pace of potential disruptions.

“We think the opportunities at the time of writing will continue to be narrow and likely come from firm market leaders and inflection candidates — the latter being names with inflecting revenue growth and operating leverage, or earlier-cycle sensitivity to IT spending recoveries,” he added.

• Companies mentioned include: BCE, Cogeco Communications, D-Wave Quantum, Flagship Communities REIT, Granite REIT, Imperial Oil, Kinaxis, Major Drilling International, Nexus Industrial REIT, Open Text, Pembina Pipeline, Quebecor, Rogers Communications, Shopify, Sienna Senior Living, Telus, VitalHub, Zedcor
• Read more: Tuesday’s analyst upgrades and downgrades

12/16/25 06:12

Fund managers turn most bullish in 3-1/2 years in ‘run it hot’ environment: BofA survey

– Reuters

Global fund managers are the most bullish in three and a half years this month, Bank of America’s survey showed on Tuesday, as optimism over a “run-it-hot” macro backdrop and policy expectations drove allocations to risk assets.

Cash holdings tumbled to a record low of 3.3 per cent from 3.7 per cent in November, as exposure to equities and commodities hit the highest since February 2022, the bank said.

The survey’s “Bull & Bear” indicator climbed to 7.9, close to a “sell signal”, suggesting that bullish investor positioning remains the biggest headwind for risk assets.

Profit expectations are at their strongest since August 2021, with 57 per cent of respondents predicting a soft landing for the global economy and just 3 per cent bracing for a hard landing, according to BofA.

AI bubbles topped the list of tail risks for the coming year. Private credit and hyperscaler spending were seen as the most likely sources of a credit event, which ranked fourth among tail risks.

203 participants with US$569-billion in assets under management responded to the global survey.

12/16/25 06:20

European stocks fall as traders wait for U.S. jobs data, dollar steady

– Reuters

European stocks fell in early trading on Tuesday, struggling to make gains as traders took a cautious position ahead of key U.S. jobs data, while the dollar stayed near its lowest in two months.

In a busy week for market data, investors were waiting for the October and November U.S. employment reports due later in the session, following delays to data collection during the U.S. government shutdown.

The data could influence expectations for the U.S. Federal Reserve’s monetary policy next year, after the Fed’s commentary when it cut rates last week was interpreted as less hawkish than anticipated, strengthening expectations for more rate cuts in 2026.

Stock markets fell during Asian trading, with MSCI’s broadest index of Asia-Pacific shares outside Japan dropping to its lowest in three weeks. Growth in China’s factory output stalled to a 15-month low in November, data showed. European indexes also opened lower, before edging slightly higher.

At 4:56 a.m. ET, the STOXX 600 was down 0.1 per cent on the day , London’s FTSE 100 was down 0.3 per cent and Germany’s DAX was down 0.5 per cent. Progress in Russia-Ukraine peace talks contributed to a fall in European defense stocks. Still, the pullback comes in the context of stock markets hitting record highs in 2025, with the STOXX 600 on track for a 14.8 per cent gain in 2025 overall.

The MSCI world equity index was down by 0.3 per cent on the day , and up 19.8 per cent on the year as a whole.

Economists predict that the U.S. jobs data will show that federal government cost-cutting led to a decline in nonfarm payrolls in October, followed by a rebound in job growth in November.

“Either you get strong numbers, so the economy re-accelerates. Or you have not that good of a number and hence expectations that the Federal Reserve will cut rates even more,” said Kevin Thozet, a member of Carmignac’s investment committee.

Investors are also watching out for U.S. inflation data on Thursday, although a number of key details will be missing, and central bank meetings including rate policy decisions from the Bank of England, the European Central Bank and the Bank of Japan

12/16/25 06:02

Before the bell: What every Canadian investor needs to know today

– S.R. Slobodian

Global markets were lower amid investor caution ahead of a slate of U.S. data, including the jobs report, that may help signal the path for Federal Reserve policy next year.

Wall Street futures were in negative territory after major North American markets closed in the red yesterday. Dow futures were down 0.17 per cent, S&P 500 futures declined 0.36 per cent and Nasdaq futures were 0.57 per cent lower as of 4 a.m. ET.

TSX futures followed sentiment lower after sagging oil prices weighed on Canada’s main stock market yesterday.

On Wall Street, markets are watching earnings from Lennar Corp.

“The most important question is whether the [jobs] report opens the door for more rate cuts in the early part of next year,” said analysts at Deutsche Bank.

“As it stands, the Fed have only signalled one further cut for 2026 in the dot plot, but we’ve repeatedly seen in this cycle how a softer labour market has pushed them back in a dovish direction.”

Overseas, the pan-European STOXX 600 was down 0.09 per cent in morning trading. Britain’s FTSE 100 declined 0.34 per cent, Germany’s DAX gave back 0.42 per cent and France’s CAC 40 inched up 0.04 per cent.

In Asia, Japan’s Nikkei closed 1.56 per cent lower, while Hong Kong’s Hang Seng dropped 1.54 per cent.

12/16/25 05:02

Oil slips on Russia-Ukraine peace deal talks, weak China data

– Reuters

Oil prices fell on Tuesday, adding to the previous session’s losses, as prospects for a Russia-Ukraine peace deal appeared to strengthen, raising expectations of a potential easing of sanctions.

Brent crude futures fell 89 US cents, or around 1.5 per cent, to US$59.67 a barrel at 4:42 a.m. ET, while U.S. West Texas Intermediate crude was trading at US$55.90 a barrel, down 92 US cents, or 1.6 per cent. Both contracts were near their lowest since May this year.

“Brent has dropped this morning to below $60 per barrel for the first time in months, as the market assesses a potential peace deal resulting in additional Russian volumes becoming available and oversupplying the market further,” said Rystad analyst Janiv Shah.

The U.S. offered to provide NATO-style security guarantees for Kyiv and European negotiators reported progress in talks on Monday to end Russia’s war in Ukraine, sparking optimism that an end to the conflict was closer.

Russia, meanwhile, said it was not willing to make any territorial concessions in talks on ending the Ukraine war, state news agency TASS quoted Deputy Foreign Minister Sergei Ryabkov as saying.

“The grind in talks will be matched with the continued grind lower in prices as we enter 2026 with all it associated predictions of ‘glut.’ Brent will make a fresh year-to-date low, but will not break below $55 a barrel before the year is out,” said PVM Oil Associates analyst John Evans.

Adding to the pressure, soft Chinese economic data released on Monday further fueled concerns that global demand may not be strong enough to absorb recent supply growth, said IG market analyst Tony Sycamore in a note.

China’s factory output growth slowed to a 15-month low, official data showed. Retail sales also grew at their slowest pace since December 2022, during the COVID-19 pandemic

12/16/25 04:30

Stocks close lower as investors position for busy week of data

– Reuters, Globe staff

Stocks closed lower on Monday as investors braced for a slew of U.S. economic data later this week while assessing reports on Federal Reserve candidates and commentary from policy makers for clues on the interest-rate outlook.

The non-farm payroll figures for October and November are due later this week, along with reports on retail sales, business activity and inflation. October’s jobs data was delayed by the government shutdown earlier this quarter. The S&P 500 and the Nasdaq had logged their steepest daily declines in more than three weeks on Friday amid concerns about inflation and debt-fuelled AI investments.

Traders also assessed Monday a report that White House economic adviser Kevin Hassett’s candidacy for the Fed chair role received some pushback from people close to U.S. President Donald Trump.

Speculation has been rife over a possible frontrunner as Jerome Powell’s term ends in May. Expectations for a dovish Fed chair have fuelled bets for interest rate cuts next year. Also on Monday, New York Fed President John Williams said the central bank’s interest rate cut last week leaves it in a good position, while Fed Governor Stephen Miran argued that current inflation does not reflect the true supply-demand dynamics.

The Dow Jones Industrial Average fell 41.49 points, or 0.09 per cent, to 48,416.56, the S&P 500 lost 10.90 points, or 0.16 per cent, to 6,816.51 and the Nasdaq Composite lost 137.76 points, or 0.59 per cent, to 23,057.41.

The S&P/TSX Composite Index ended down 43.95 points, or 0.1 per cent, at 31,843.44, slightly extending its pullback from a record closing high on Thursday.