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

Global equity markets displayed significant divergence, with Japan's Nikkei reaching a record high on news of a pro-growth prime ministerial candidate, while French stocks sharply declined due to political instability, weighing on the euro and broader European assets. US futures advanced, buoyed by strong tech sector performance, notably AMD's over 33% surge following an AI chip supply deal with OpenAI. Concurrently, oil prices rose after OPEC+ announced a more modest production increase than anticipated, and spot gold hit a new all-time high, while currency markets saw volatility with the yen slumping on financial concerns and the Canadian dollar weakening. Investors continue to monitor the unresolved U.S. government shutdown and the upcoming earnings season for economic indicators.

Analysis

Log in or create a free account to listen to this article. Equities Wall Street was set for a higher open on Monday while Japanese stocks hit a record high and French stocks dipped as political news in both countries drove stock and currency moves. Dow E-minis were up 0.21 per cent, S&P 500 E-minis rose 0.41 per cent and Nasdaq 100 E-minis were up 0.93 per cent. AMD soared more than 33.2 per cent after the semiconductor company announced that it will supply its chips to ChatGPT maker OpenAI as part of a deal to team up on artificial intelligence infrastructure. The U.S. government shutdown showed little signs of resolution. Investors have been showing a strong appetite for tech stocks and an increased focus on the upcoming earnings season for clues about the state of the U.S. economy. TSX futures were also up, supported by positive Wall Street sentiment and rising commodities prices. December futures on the S&P/TSX index were up 0.3 per cent. On Wall Street, markets were watching earnings from Constellation Brands Inc. In Europe, French assets slid after new Prime Minister Sebastien Lecornu resigned amid mounting pressure from leftist lawmakers over his budget plans, thrusting the euro zone’s second-largest economy deeper into crisis. Paris’s CAC 40 was down 1.33 per cent after earlier falling as much as 2.2 per cent. Bank stocks were particularly affected. “It certainly makes people wary about European assets at this point because of the uncertainty and the spillover effects that go from France just being unable to find its way out of this malaise,” IG Group chief market analyst Chris Beauchamp said. The pan-European STOXX 600 was up 0.12 per cent in afternoon trading. Britain’s FTSE 100 rose 0.24 per cent and Germany’s DAX was up 0.23 per cent. Japan’s Nikkei closed 4.75 per cent higher after soaring to a record high above 48,000 for the first time ever on news that the ruling government party elected fiscal and monetary dove Sanae Takaichi as leader, putting her on course to become prime minister. “Takaichi seems very pro-growth and pro-markets, and that’s been felt in the Japanese equity market this morning ... that will put more fuel into Asian equity markets,” said Rory McPherson, CIO at Magnus Financial Discretionary Management. Hong Kong’s Hang Seng was down 0.67 per cent ahead of a holiday on Tuesday. Commodities Oil prices rose more than 1 per cent after OPEC+’s planned production increase for November was more modest than expected. Brent crude futures climbed 1.4 per cent to US$65.42 a barrel and West Texas Intermediate crude was at US$61.72, also up about 1.4 per cent. “The market was expecting a somewhat larger increase from OPEC+ as shown in the structure last week,” said Janiv Shah, an analyst at Rystad. “However the modest 137,000 bpd bloats the already-oversupplied balance for the fourth quarter of 2025 and 2026.” In other commodities, spot gold hit another all-time high and was up 1.5 per cent to US$3,942.59 per ounce. Currencies and bonds The Canadian dollar weakened against its U.S. counterpart. The day range on the loonie was 71.58 US cents to 71.73 US cents in early trading. The Canadian dollar was down about 1.10 per cent against the greenback over the past month. The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.5 per cent to 98.21. Amid France’s political turmoil, the euro slid 0.43 per cent to US$1.1694. The British pound lost 0.28 per cent to US$1.3442. The yen slumped as much as 2 per cent. Worries about Japan’s finances sent the yield on 30-year government bonds to an all-time high. In bonds, the yield on the U.S. 10-year note was last up at 4.16 per cent. Economic news Several previously scheduled U.S. data reports could be released during the week if the U.S. government shutdown is resolved, including September nonfarm payrolls With Reuters, The Associated Press, The Canadian Press and Globe staff Sign up for our new Business Brief newsletter. A daily look at the most important business stories that are making news and moving markets, written by Chris Wilson-Smith Global equity markets are exhibiting significant divergence driven by specific political and corporate catalysts. In Japan, the Nikkei surged 4.75% to a record high on news of a pro-growth political leader, yet this was paradoxically accompanied by a 2% slump in the yen and an all-time high yield on 30-year government bonds, signaling deep-seated concerns over the nation's fiscal health. Conversely, European markets were fractured, with French equities (CAC 40 -1.33%) and the euro (-0.43%) falling sharply on political instability after the Prime Minister's resignation, even as German and UK indices posted modest gains. In the U.S., pre-market futures pointed higher, led by the Nasdaq 100 E-minis (+0.93%), with momentum heavily concentrated in the tech sector. This was exemplified by AMD's extraordinary 33.2% pre-market surge following its announcement of a chip supply deal with OpenAI, underscoring the market's intense focus on the artificial intelligence narrative. Broader market sentiment remains cautious amid the unresolved U.S. government shutdown, while rising commodity prices, including a new all-time high for spot gold (+$3,942.59/oz) and a 1.4% increase in crude oil, suggest investors are simultaneously seeking safe havens and hedging against inflationary pressures.

Key Decisions for Investors

• Given AMD's 33.2% surge on its OpenAI deal, investors should re-evaluate exposure to the semiconductor sector, as company-specific AI catalysts are generating significant alpha independent of broader market conditions.
• The sharp divergence between Japan's record-high Nikkei and its slumping yen suggests that long Japanese equity positions should be considered with a currency hedge to isolate stock market gains from underlying fiscal policy risks.
• The political turmoil driving French assets lower, particularly bank stocks, indicates that reducing exposure to the CAC 40 or hedging against further declines in the euro (FXE) may be prudent until stability is restored.
• With spot gold hitting a new all-time high and oil prices rising amid geopolitical and domestic U.S. political uncertainty, maintaining strategic allocations to commodities can serve as a valuable hedge against both inflation and systemic risk.