Positive Start Seen For Canadian Stocks

Bay Street is poised for a firm open, tracking positive global sentiment driven by significant progress on U.S. trade deals, including definitive agreements with Japan (featuring a 15% tariff on Japanese exports and a $550 billion investment commitment) and the Philippines, with further agreements anticipated. Rogers Communications reported a modest increase in Q2 2025 adjusted net income to C$632 million, while several other major Canadian companies are scheduled to release their quarterly results. In commodities, West Texas Intermediate crude futures declined over 2%, gold was slightly down, and silver edged higher.

Analysis

Canadian equity markets are positioned for a firm opening, propelled by broad optimism in global markets stemming from significant progress in U.S. trade negotiations. The announcement of definitive trade agreements with Japan and the Philippines, coupled with anticipation of a U.S.-EU deal before the August 1 deadline, is the primary driver of positive sentiment. The U.S.-Japan pact is particularly noteworthy, featuring a 15% tariff on Japanese exports and a commitment from Tokyo for $550 billion in U.S. investments. On the corporate front, Rogers Communications (RCI) reported a modest year-over-year increase in Q2 adjusted net income to C$632 million from C$623 million. However, the market faces potential crosscurrents from the commodities space, where West Texas Intermediate crude futures have declined sharply by 2.02% to $64.87 a barrel. Today's session will be further influenced by a slate of key earnings releases from companies including Suncor Energy and West Fraser Timber, as well as the release of Canadian new housing price data.

Key Decisions for Investors

• Given that macro trade developments are the dominant market driver, investors should closely monitor news regarding the U.S.-EU negotiations, as any outcome before the August 1 deadline will likely be a significant catalyst.
• The sharp 2% decline in WTI crude presents a headwind for the energy sector; the upcoming earnings report from Suncor Energy will be a critical indicator of the sector's resilience and outlook.
• Rogers Communications' marginal earnings growth offers little immediate catalyst, so attention should pivot to the day's other major earnings reports for fresh, company-specific performance indicators.
• Consider positions in sectors sensitive to trade and global growth, but remain cautious on energy-linked equities until there is greater price stability in the crude market.