Canadian stocks slipped on Monday

Image Source : Krish Capital Pty Ltd

Index Update:  Canadian stocks slipped on Monday amid lingering global trade uncertainty and ongoing US-Canada tariff negotiations. The benchmark S&P/TSX Composite Index pushed its way to reach an intraday high of 27,100.16 within an hour after opening. However, unable to hold on to that level, it turned downwards to settle marginally lower at 27,020.28, down by 15.88 (or 0.06 %).

Macro Update:  Expectations of US Fed advancing their rate cut before September are now out of discussion after last week's US jobs data revealed decent numbers. Canada is trying to wean itself off from reliance on the US where it sends around 75% of its exports. To sidestep US, Canada is expanding its non-US business relations.

Top Movers:  Sandstorm Gold (6.16%), Ngex Minerals (5.67%), BCE Inc (3.18%), and Telus Corp (1.68%) were the prominent gainers.

Our Stance:  From a technical standpoint, focus now turns to key support levels. The index is currently trading above the near-term support zone at 26,700, a crucial level for sustaining bullish momentum. If this support holds, it could trigger renewed buying interest and pave the way for a potential rebound toward recent highs. However, a clear break below 26,700 may increase selling pressure and signal the possibility of a deeper correction.

Commodity Update:  The dollar strengthened on Tuesday after President Trump announced new tariffs, effective August 1, on nations including Japan and South Korea. Gold rose 0.14% to $3,347.40, silver gained 0.38% to $37.04, and copper edged up 0.13% to $9,830.45. However, Brent crude slipped 0.29% to $69.37 as investors weighed the impact of the tariffs alongside a larger-than-expected OPEC+ output increase for August.

Technical Update:  On Monday, the S&P/TSX Composite Index posted a modest decline, slipping 15.88 points, or approximately 0.06%, to close at 26,329.00. The pullback was primarily driven by broad weakness in the real estate sector, which fell by a notable 1.24%. Despite this minor retreat, the index remains comfortably positioned above its 21-period Simple Moving Average (SMA), a key technical indicator that often acts as dynamic support in trending markets. This suggests that the short-term uptrend remains intact and that the recent dip may represent a healthy consolidation rather than the start of a broader reversal. From a technical perspective, attention now shifts to key support levels. The index is currently holding above the near-term support zone at 26,700 a critical threshold for maintaining bullish momentum. If this level continues to hold, it could attract renewed buying interest and set the stage for a potential rebound toward recent highs. Conversely, a decisive break below 26,700 may intensify selling pressure, potentially signaling a deeper correction ahead.