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Image Souce: Krish Capital Pty Ltd
Index Update: The Canadian market closed higher on Tuesday, riding on strong gains in utilities, consumer staples and healthcare sectors. The benchmark S&P/TSX Composite Index closed up 131.84 points or 0.54% at 24,387.90, near the day's high of 24,393.82.
Macro Update: On the economic front, the S&P Global Canada Composite PMI rose to 50.7 in October 2024 from 47.0 in September, indicating a return to marginal growth in the private sector after four months of contraction. The S&P Global Canada Services PMI rose to 50.4 in October 2024, up from 46.4 in September, signaling a marginal expansion in the services sector for the first time in five months.
Top Movers: Capital Power Corporation (CPX.TO) climbed 5.3%. Sprott Inc (SII.TO), Celestica Inc (CLS.TO), Teck Resources (TECK.B.TO), goeasy (GSY.TO) and Sun Life Financial (SLF.TO) gained 3.2 to 4.4%.
Our Stance: The index's technical outlook remains favorable, with the S&P/TSX staying well above its 50-period Simple Moving Average (SMA), a bullish signal that reinforces the prevailing upward trend. The current Relative Strength Index (RSI), reading of 54.39 supports this, suggesting that the market has not yet entered overbought territory and still has potential for further gains, as long as buying momentum holds.
Commodity Update: The U.S. dollar surged broadly on Wednesday, fueled by early exit polls suggesting a tight lead for Republican Donald Trump in the presidential race. Commodities saw mixed performance: gold increased 0.02% to $2,750.50/oz, silver dropped 0.59% to $32.58, and copper fell 0.83% to $9,655.50/ton. Brent crude slipped 0.46% to $75.18 per barrel after data showed a larger-than-expected U.S. inventory build, while concerns over potential Gulf of Mexico supply disruptions remained. Market focus shifted to the presidential election outcome and the upcoming FOMC rate decision, which could influence broader economic trends.
Technical Update: The S&P/TSX Composite Index's modest gain of 131.84 points on Tuesday, bringing it to a close at 24,387.90, indicates a positive sentiment among investors, albeit within a relatively narrow range. The 0.54% uptick underscores ongoing confidence in the market, which is further supported by a solid performance in the utilities sector, rising by 1.65%. This sector’s outperformance suggests that defensive sectors are drawing interest, perhaps as a hedge amid broader market uncertainties. The index's technical outlook remains favorable, with the S&P/TSX staying well above its 50-period Simple Moving Average (SMA), a bullish signal that reinforces the prevailing upward trend. The current Relative Strength Index (RSI), reading of 54.39 supports this, suggesting that the market has not yet entered overbought territory and still has potential for further gains, as long as buying momentum holds.