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Index Update: TSX Ends Modestly Higher After BoC Rate Decision. The benchmark S&P/TSX Composite Index settled higher by 53.85 points or 0.21% at 25,473.30. The index dropped to 25,361.26 after the Fed announced its monetary policy but regained lost ground subsequently.
Macro Update:The Bank of Canada lowered interest rates by a quarter point, as widely expected. With this the overnight rate has dropped to 3%, the bank rate to 3.25% and the deposit rate to 2.95%.
Top Movers: Tenaz Energy Corp (TNZ.TO) gained about 5.4%. MAG Silver Corp (MAG.TO), Rogers Communications (RCI.A.TO), MEG Energy Corp (MEG.TO), Capital Power Corporation (CPX.TO), Metro Inc (MRU.TO), Pan American Silver Corp (PAAS.TO), Cameco Corporation (CCO.TO) and First Quantum Minerals (FM.TO) closed higher by 3 to 4.5%.
Our Stance: From a technical perspective, the index remains in a favorable position, trading above its 21-period Simple Moving Average (SMA), which is indicative of a bullish trend. Currently, the index is testing a crucial support level around 25,000. The ability to maintain this level is important for sustaining the upward momentum. A breach below 24,800 could signal a retracement risk, with key support levels on the weekly chart identified as around 24,000 to 24,600.
Commodity Update: On Thursday, the U.S. dollar remained steady after the Federal Reserve signaled a pause in interest rate cuts. The Fed held rates steady, with Chair Jerome Powell indicating no rush to lower them further. President Donald Trump’s policies, including potential tariffs on Canada, Mexico, and China, continue to threaten the Fed's outlook. In commodities, gold rose 0.10% to $2,796.00, silver increased 0.64% to $31.58, while copper fell 0.10% to $9,067.50. Brent crude saw a slight increase of 0.10%, closing at $76.71 per barrel amid ongoing tariff concerns with major crude suppliers.
Technical Update: On Wednesday, the S&P/TSX Composite Index posted a modest gain, advancing 53.85 points to close at 25,473.30 marking an increase of 0.21%. This positive performance was supported by strong trading volumes, reflecting sustained investor enthusiasm and confidence in the market. A standout contributor to the day's gains was the energy sector, which rose by 1.20%, suggesting growing optimism in this space. From a technical perspective, the index remains in a favorable position, trading above its 21-period Simple Moving Average (SMA), which is indicative of a bullish trend. The Relative Strength Index (RSI) stands at 61.32, signaling strength in the market but without reaching overbought conditions, leaving room for further gains. Currently, the index is testing a crucial support level around 25,000. The ability to maintain this level is important for sustaining the upward momentum. A breach below 24,800 could signal a retracement risk, with key support levels on the weekly chart identified as around 24,000 to 24,600. For the bullish trend to remain intact, it is essential for the index to hold above these support levels, ensuring continued growth potential in the near term.