The Morning Bull - Canadian Market Morning Update Thursday, 29 Oct 2026
Canadian equities are set for a cautious, higher open, with sentiment dominated by the Bank of Canada's surprise shift back into hiking mode. The fresh move to a 2.50% policy rate is the reference point for risk today.
The central bank lifted its benchmark rate to 2.50% in October, the first increase in three years, and explicitly tied the step to higher energy and inflation risks. It also flagged that further tightening is possible if price pressures prove persistent.
A higher policy rate filters quickly into borrowing costs for mortgages, business loans, and government debt. This can compress valuation multiples and squeeze interest sensitive balance sheets. Rate sensitive sectors often feel this first, while cash generative, low leverage businesses may find the new hurdle rate more manageable.
The unresolved question is how firmly the Bank of Canada leans into this stance once Canada's upcoming monthly GDP data is released on Friday. Stronger activity would support the case for additional hikes, while any soft patch could test today's hawkish tone.
Stocks to Watch Before the Opening Bell
Athabasca Oil (ATH)
Athabasca Oil is in focus after reporting third quarter results that included a 20% quarter over quarter production increase and progress on the Leismer expansion toward 40,000 bbl/d by the end of 2027. The bigger story is Cenovus Energy's agreement to buy Athabasca in a $5.7b cash and share deal. Watch for terms, closing conditions, and any regulatory questions.
GFL Environmental (GFL)
GFL Environmental released third quarter 2026 figures with revenue and adjusted EBITDA above expectations and 7.4% organic revenue growth plus over 115 basis points of underlying margin expansion. The board also set up a Special Committee to review unsolicited take private offers, with a proposal deadline of November 9. Investors will be watching for any formal bid details or competing offers.
West Fraser Timber (WFG)
West Fraser Timber paired its third quarter 2026 update with news of indefinite curtailments at its Huguley OSB mill in Alabama and lumber mill in Arkansas. Management cited weak wood products demand tied to housing affordability, higher energy costs, and tariffs. The shutdowns cut OSB capacity by 500 million square feet and lumber output by 225 million board feet, with a fourth quarter asset impairment of $200m to $220m expected.
Top Movers
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Celestica (TSX:CLS)jumped 8.29% after strong Q3 earnings, raised guidance, and optimistic AI infrastructure demand commentary.
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Aecon Group (TSX:ARE)gained 5.97% as investors focused on large infrastructure backlog and upcoming third quarter 2026 results.
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Precision Drilling (TSX:PD)advanced 5.45% following an analyst upgrade, a higher price target, and recently reported third quarter 2026 earnings.
Top Losers
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Extendicare (TSX:EXE)declined 2.23%.
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FirstService (TSX:FSV)fell 2.08% despite recent positive updates on property management wins and service recognition.
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Rogers Communications (TSX:RCI.B)slipped 1.99% as investors weighed a recent price target cut and competitive wireless headlines.
On The Radar
For Canadian investors, the next few sessions are all about local GDP, a heavy slate of TSX earnings, and a dense block of US inflation and growth data that feeds directly into rate expectations.
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Canada GDP MoM (Aug and Sep prelim)Fri 30 Oct. The market is looking for 0.2% growth in August and a 0.1% preliminary gain for September, and any miss against those figures would quickly influence Bank of Canada rate expectations and the Canadian dollar.
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US PCE inflation, income and spendingThu 29 Oct. Consensus looks for headline PCE at 0.5% month on month and 3.6% year on year, with core at 0.3%. A hotter print would add pressure on North American rate expectations that feed into Canadian borrowing costs.
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US Q3 GDP growth and jobless claimsThu 29 Oct. Economists expect 3.2% quarter on quarter GDP and 199,000 initial claims. Any upside surprise on activity with still low layoffs would tend to support US yields and shape equity risk appetite in Canada.
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Suncor Energy (SU) Q3 resultsWed 04 Nov. The key figure is cash flow from operations because it links directly to capital spending plans, shareholder returns, and how investors treat the broader Canadian energy sector after the recent move in oil prices and Bank of Canada rates.
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Manulife Financial (MFC), Sun Life Financial (SLF), Great-West Lifeco (GWO) Q3 earningsWed 04 Nov. For the big insurers, the focus is on margins and any commentary on investment income under higher yields, which matters for how rate sensitive financials trade on the TSX.
Sector & Industry Watch
Banks: Higher prime now flowing through
Banks have gained over the past week, and the recent 7 day move sits on top of a stronger 1 year return than the overall CA Market. Every major lender has lifted the prime rate to 4.70%, which feeds directly into variable mortgages, credit lines, and many small business loans.
The next swing point is Friday's Canada GDP report, because any surprise on growth can quickly influence how investors view loan demand and credit risk across the Banking sector.
Energy: Strong year, softer recent tone
Energy and Oil and Gas both show very strong year to date and 1 year readings, while their 7 day returns have eased slightly after a firm 30 day run. Fresh deals and spending plans, from Cenovus acquiring Athabasca Oil to Whitecap Resources increasing its 2026 budget and dividend, keep capital allocation and balance sheet strength front of mind.
For this group, the Canada August and preliminary September GDP figures are the key check, because they help show how much of the country's current activity is tied to resource linked output.
Materials: Mining slump meets busy project pipeline
Materials has fallen sharply over the past month, and the 7 day move is weaker again, with Metals and Mining declining even more over both periods. At the same time, companies such as West Fraser Timber, PMET Resources, and several explorers are pushing drilling, pre feasibility work, and mill decisions that often require new funding.
The main event that can shift sentiment is Friday's Canada GDP release, since a softer or firmer growth pulse can influence how much patience investors have with longer dated mining and forestry projects.
Real Estate: Rate sensitive trade under pressure
Real Estate has declined over the past week after a flat 30 day stretch, and both year to date and 1 year returns are weaker than the CA Market. Higher prime rates to 4.70% mean pricier mortgages and commercial loans, which matters for REITs refinancing older debt and for developers trying to make new apartment or office projects pencil out.
The local data point to track is Canada's monthly GDP on Friday, because any sign of softer activity can affect views on occupancy, rent growth, and financing conditions across residential and commercial Real Estate.
Tech: AI spending stories vs past drawdown
Tech has posted a small positive 7 day return while still sitting lower year to date, and Semiconductors remain under heavy pressure across all the performance periods given. Company headlines such as HIVE Digital's C$129m AI GPU funding deal and Docebo's new AI driven learning tools show where capital and product focus are going inside the sector.
The next real test for Tech comes through upcoming Canadian earnings calls, where comments on IT budgets, AI spending, and software demand will help you judge how well recent share moves line up with business conditions.
Identify The Next Market Leaders
With the Bank of Canada lifting its policy rate to 2.50% and prime now at 4.70%, rate pressure is real, so start with this list of 8 resilient stocks with low risk scores .
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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