Stock Market's Bay Street Predicted to Start Off Poorly

Stock Market's Bay Street Predicted to Start Off Poorly

In the second quarter of 2025, ARC Resources Ltd. reported a net income of $396 million or $0.68 per share, marking a significant financial milestone for the company. However, the broader economic landscape is marred by trade tensions and tariffs, with the U.S. imposing higher tariffs on Canada and other countries.

President Trump's executive order, aimed at addressing a national emergency related to illicit drug flow across the northern border, increased U.S. tariffs on Canadian goods not covered under the USMCA trade agreement. These tariffs, effective August 1, target goods transshipped through third countries to evade the tariffs.

The tariff hike is part of a broader global economic disruption, alongside tariffs imposed on multiple countries. According to J.P. Morgan Global Research, U.S. tariffs—including a universal 10% tariff and higher tariffs on China—are estimated to reduce global GDP by about 1%. The negative impact on business confidence can lead to reduced spending, hiring, and may increase recession risks globally.

For Canada, these increased tariffs could raise costs for Canadian exporters in affected sectors, reduce competitiveness in the U.S. market, and prompt further retaliatory measures or economic adjustment. The fact that goods qualifying for USMCA remain exempt offers partial relief, but non-exempt industries and companies face higher trade barriers.

The Canadian market ended weak on Thursday amid a lack of progress in US-Canada trade negotiations. TELUS Corp. announced a plunge in net income attributable to common shares for the second quarter. On the other hand, Enbridge, Inc. reaffirmed its distributable cash flow and adjusted EBITDA guidance for the full-year 2025.

Meanwhile, the benchmark S&P/TSX Composite Index closed at 27,259.78, down by 110.18 points or 0.4%. West Texas Intermediate Crude oil futures are down $0.39 or 0.56%, while gold and silver futures are down $2.20 or 0.06% and $0.182 or 0.51%, respectively.

Elsewhere, Asian stocks fell on Friday, and major markets in Europe are down sharply in negative territory. The decline in European markets is largely due to the potential economic impact of fresh U.S. levies.

In other news, U.S. President Donald Trump asked 17 major global pharmaceutical companies to lower drug prices in the U.S., causing pharma stocks to come under heavy selling pressure. U.S. tariffs on imports from most countries are set at a minimum of 10%, with imports from countries with trade surpluses facing duties of 15% or higher.

A report on Canadian manufacturing activity is due from S&P Global at 9:30 AM ET. Canadian and U.S. futures are lower at present, reflecting the ongoing economic uncertainties.

1. The tariff increase imposed on Canadian goods by President Trump, in response to illicit drug flow concerns, is causing challenges for businesses in affected sectors, as they face higher costs and reduced competitiveness in the U.S. market.
2. The broader industry landscape is also impacted by the financial industry's concerns regarding the potential negative effects of the tariffs on global GDP, business confidence, spending, hiring, and recession risks.
3. For individuals focusing on personal finance, the increased trade tensions and tariffs can have implications on their investment portfolios, potentially impacting stocks and commodities such as West Texas Intermediate Crude oil, gold, and silver.
4. In the world of technology, the ongoing trade disputes and economic uncertainties could influence various sectors, including businesses that rely heavily on global supply chains for resources and manufacturing.
5. Education and self-development resources may prove valuable for those seeking to understand the political and economic ramifications of such trade disputes and tariffs, allowing for more informed decisions in sectors like finance and investing.
6. Schools and programs in fields like economics and political science can offer insights and analyses for those looking to navigate the shifting landscapes of both finance and the broader economy amidst these disruptions, as well as for those interested in government policies affecting matters like crime and justice, and even sports industries.

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