The Canadian market closed weak on Friday

Image Souce: Krish Capital Pty Ltd

Index Update: The Canadian market closed weak on Friday, amid concerns about global economic growth and tariff hike threats by U.S. President-elect Donald Trump. The benchmark S&P/TSX Composite Index, which opened slightly down, fell to a low of 25,216.42 and ended the day's session at 25,274.30 with a loss of 136.41 points or 0.54%. The index shed about 1.6% in the week.

Macro Update: On the economic front, data from Statistics Canada showed manufacturing sales in the country rose 2.1% month-over-month in October, rising for the first time in three months.

Wholesale sales in Canada rose 1% month-over-month in October, extending the revised 1.3% increase in September.

Top Movers: Transcontinental Inc. (TCL.B.TO) rallied 4.4%. Bausch + Lomb Corporation (BLCO.TO), Bombardier Inc (BBD.B.TO), Hut 8 Corp (HUT.TO), Transcontinental (TCL.A.TO), Senvest Capital (SEC.TO), Descartes Systems Group (DSG.TO), Celestica Inc (CLS.TO), Great-West Lifeco (GWO.TO) and Loblaw Companies (L.TO) gained 1 to 3.5%.

Our Stance: The immediate support for the index is at 25,000, a level that could act as a buffer against further declines. If the index manages to hold above this level, a potential rebound could materialize, especially if there is stabilization in sectors like energy. However, a break below 25,000 could open the door for a deeper pullback, with support zones identified at 25,000 and 24,900. These levels will be critical for traders looking to assess the health of the market and the likelihood of a continuation or reversal of the current trend.

Commodity Update: The U.S. dollar remained near a three-week high against major currencies on Monday, amid expectations that the Federal Reserve will cut interest rates this week but signal a gradual easing pace for 2025. Bitcoin surged past $105,000 for the first time, fueled by reports that President-elect Donald Trump may proceed with a strategic Bitcoin reserve. In commodities, gold slipped 0.15% to $2,671.70 per ounce, silver gained 0.05% to $31.04 per ounce, and copper fell 0.15% to $9,048.50 per ton. Oil prices were subdued, with Brent crude down 0.30% to $74.28, as markets awaited the Federal Reserve's policy decision and assessed Chinese economic data.

Technical Update: On Friday, the S&P/TSX Composite Index closed at 25,274.30, marking a 0.54% decline for the day. This drop was largely driven by weakness in the industrials sector, which fell 1.74%, and contributed significantly to the broader market pullback. Despite this, the index remains above its 50-period Simple Moving Average (SMA), signaling that the short-term uptrend is still in place. However, there are signs that momentum may be slowing. The Relative Strength Index (RSI) dropped to 49.79, which indicates that bullish momentum is losing steam. Key technical levels are now in focus as the market navigates this uncertainty. The immediate support for the index is at 25,000, a level that could act as a buffer against further declines. If the index manages to hold above this level, a potential rebound could materialize, especially if there is stabilization in sectors like energy. However, a break below 25,000 could open the door for a deeper pullback, with support zones identified at 25,000 and 24,900. These levels will be critical for traders looking to assess the health of the market and the likelihood of a continuation or reversal of the current trend.