Introduction to the Week
The holidays were a magical time with the kids, filled with a sense of wonder and excitement. As the days went by, the initial magic gave way to a more challenging reality, with the game of "Can we go 30 minutes without whining?" becoming a daily challenge. By the end of the week, this had morphed into "Can we make it 30 minutes without crying?" with very few winners.
Global Events: Venezuela and the Oil Market
The United States’ recent actions in Venezuela, including the removal of President Nicolás Maduro, have sent shockwaves around the world. This event could have significant implications for the energy sector, given that Venezuela boasts the world’s largest oil reserves, with its heavy oil being the most similar to Canada’s. According to energy investor Eric Nuttall of Ninepoint Partners, this development presents headline risk to oil, particularly for Canadian large-cap oil producers, as Venezuela may become a major competitor in the medium term for incremental heavy production. However, any immediate impact is unlikely, potentially leading to a muted investor reaction.
The Impact on Gold
Each encroachment into sovereign territory, such as the situation in Venezuela, adds to the reasons for investing in gold, notes TD Asset Management head of commodities Hussein Allidina. The confiscation of Afghan and Russian reserves has led to a wake-up call for emerging-market central banks, which are now more inclined to diversify their reserves, potentially driving demand for gold. This trend could continue as central banks transition from holding a majority of their reserves in paper, seeking more secure assets like gold, albeit with the risk that such holdings could be subject to the whims of the U.S.
Economic Outlook: Canada and the U.S.
Canada is expected to report a loss of 2,500 jobs in December, according to economists’ estimates, though the range of predictions is wide, spanning from a loss of 29,000 jobs to a gain of 34,000 jobs. The unemployment rate is anticipated to rise, but the Bank of Canada is unlikely to react to any number, with the market betting on no change in interest rates for the year. In contrast, the U.S. is expected to add 59,000 jobs in December, with a predicted slight decrease in the unemployment rate to 4.5%. However, there are diverging views on the U.S. employment situation, with some analysts suggesting that unemployment could actually increase to 4.7%, reflecting a more nuanced economic reality.
Market Performance: Aritzia and Constellation Brands
Aritzia Inc. has seen its shares double in 2025, setting high expectations for its upcoming quarterly results. With robust traffic growth in both Canada and the U.S., the retailer is poised to deliver another strong quarter, potentially exceeding analyst estimates of 16% comparable sales growth. On the other hand, Constellation Brands Inc., owner of Corona and Kim Crawford, faces challenges due to a structural downturn in alcohol consumption in North America, with a record low 54% of U.S. adults drinking alcohol. The stock has plunged 35% over the past year, and upcoming results are likely to reflect these trends, further impacted by U.S. Immigration and Customs Enforcement raids and Hispanic consumer malaise.
Conclusion
The week ahead is filled with significant economic and political events that will shape the markets. From the aftermath of the U.S. actions in Venezuela to the economic outlook in Canada and the U.S., and the performance of key stocks like Aritzia and Constellation Brands, investors will be watching closely. As the global landscape continues to evolve, understanding these developments will be crucial for making informed investment decisions. The "In the Money with Amber Kanwar" podcast provides insights into these and other financial topics, offering a valuable resource for those looking to navigate the complex world of investing.
