04:23 PM EST, 12/19/2024 (MT Newswires) -- The Toronto Stock Exchange slumped for a sixth-straight session on Thursday, as market watchers and investors await a cabinet shuffle from Prime Minister Justin Trudeau tomorrow as Canada prepares its front-line team to defend against potential trade tariffs from the United States early in 2025.

The S&P/TSX Composite Index closed down 143.06 points to finish at 24,413.94, the lowest since Nov.5 and bringing its losses over the past six sessions to more than 1,200 points. Battery Metals, down 3.98%, Telecoms, down 1.14%, and Industrials, down 1.19% were the biggest decliners. There were no gainers on the day.

It looks like newly appointed Dominic LeBlanc will remain as finance minister beyond Friday despite reports that Trudeau would have preferred to have former Bank of Canada and Bank of England governor Mark Carney take up the role. Trudeau himself is reportedly thinking about his own position after Chrystia Freeland resigned as his deputy PM and finance minister earlier this week.

Media reports suggest more members of the governing Liberal Party are now publicly calling for Trudeau to step aside ahead of any trade war with the Trump Administration and with a Canadian federal election slated for late 2025 at the latest, though Trudeau is leading a minority Liberal government and could be defeated in a vote of non-confidence by the other parties.

Bloomberg is reporting that investment bankers are urging Toronto-listed companies to buy a business or raise some money as deal volumes in Canada have fallen to their lowest levels in 23 years. Equity and equity-linked offerings in Canada fell for the third straight year to hit their lowest point since 2001, according to league tables compiled by Bloomberg.

There were 236 deals in 2024, raising C$17.2 billion, compared with C$19.8 billion in 2023. The activity stands in sharp contrast to the United States., where such offerings have climbed for the third straight year, data compiled by Bloomberg show.

"We need corporate Canada to become greater risk takers," said Peter Miller, head of equity capital markets at BMO Capital Markets in Toronto, according to the Bloomberg report. "We just need corporate Canada to, you know, want to take some risks, strap on some capital projects and do more M&A to fuel growth."

Miller reportedly said that while the number of deals dropped in 2024, the proportion of so-called clean deals rose, indicating investors have appetite for more.

The problem is not demand but supply, he added. In a clean deal, Bloomberg noted, banks are able to smoothly sell securities of a transaction they underwrote, whereas in a hung deal they may need to offer deeper discounts or risk being stuck with unsold inventory.

Elsewhere, Rosenberg Research published a note that says not all TSX sectors are equal in the scenario of Trump tariffs, with those to feel the brunt all falling under the Materials, Industrials, and consumer-related sectors. These include: Aerospace & Defense; Industrial Machinery & Supplies; Leisure Products; Steel; Fertilizers & Agricultural Chemicals; Packaged Foods; Forest Products; Pharmaceuticals; Metal, Glass & Plastic Containers; and Auto Parts & Equipment round out the list of top 10 industries to feel the brunt.

Rosenberg Research added: "Anything service-related would be a relative outperformer, given they are spared from tariffs, although an area like rail transportation, which is a service that relies on goods, would be a key exception. In general, domestic-focused providers, such as Media & Entertainment or Health Care Facilities, would be immune, as would those that would benefit from a travel and tourism boom, such as airlines, as a result of a plunging loonie. Not to mention those that also act as bond proxies in the stock market and would get a lift from lower rates, including Banks, Telecom Services, and Utilities."

Ahead of a possible tariff war, Bloomberg cited Canada's new finance minister as saying the government here needs to preserve its fiscal ability to support households and businesses if Donald Trump's threats of blanket tariffs of up to 25% on products from both Canada and Mexico materialize into an economic shock.

"I'm reassured that the government has the fiscal room if there's a decision that has to be made to intervene significantly," Dominic LeBlanc said Wednesday on a political podcast called The Herle Burly.

Meanwhile, The Associated Press reported today the U.S. increasingly relies on Canadian crude oil to meet domestic demand and that relationship faces potential strain amid the tariff threat. It noted more than 50% of crude oil imported to the United States. comes from Canada, up from 33% in 2013. The increase follows a jump in production from Canada's western provinces and growing pipeline capacity to its southern neighbor. Another roughly 10% of imports come from Mexico.

But The Canadian Press noted a new report by Canadian Manufacturers and Exporters saying the tariffs threatened could be potentially devastating for Canadian businesses and workers. The report based on a poll of more than 300 manufacturers says nearly nine in 10 Canadian manufacturers would face significant or very severe impacts if the U.S. imposes tariffs on Canadian imports.

West Texas Intermediate (WTI) crude oil closed lower on Thursday after the U.S. dollar rose to a two-year high after the Federal Reserve a day earlier made its third-straight cut to interest rates while indicating it is likely to slow the pace of cuts in the new year. WTI crude for January delivery closed down US$0.67 to US$69.914 per barrel, while February Brent oil closed down $0.51 to US$72.99.

Gold dropped for a sixth-straight session late afternoon on Thursday, falling to five-week low after the Fed said it expects to slow the pace of interest-rate cuts in the new year, sending the dollar to a two-year high. Gold for February delivery was last seen down US$41.20 to US$2,612.10, the lowest since Nov.15.