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Index Update: The benchmark S&P/TSX Composite Index ended with a loss of 91.58 points or 0.36% at 25,442.91, after scaling a low of 25,380.38 and a high of 25,587.53 intraday. The index recorded a weekly loss of 0.35%.
Macro Update: Data from Statistics Canada showed employment in Canada advanced by 76,000 in January 2025, marking the sixth consecutive monthly increase. In December 2024, the economy had added 91,000 jobs.
The unemployment rate in Canada fell to 6.6% in January 2025 from 6.7% in the previous month. That was less than the forecast for a 6.8% drop.
Top Movers: Converge Technology Solutions (CTS.TO) soared more than 53%. Lightspeed Commerce (LSPD.TO) and Coveo Solutions (CVO.TO) gained 4% and 2.6%, respectively. BlackBerry (BB.TO) climbed 1.8%.
Our Stance: The market's bullish momentum continues to hold, despite the recent pullback. Looking ahead, the 25,100 level stands as a critical support zone. If the index can maintain its position above this threshold, the potential for a rebound remains intact, supporting the outlook for continued bullishness. However, should the index break below this support, attention will shift to the 25,000 and 24,600 levels as the next key areas to watch.
Commodity Update: The U.S. dollar strengthened on Monday following President Donald Trump's announcement of a new 25% tariff on all steel and aluminium imports, putting pressure on the euro and commodity-driven currencies like the Australian and New Zealand dollars. Trump also stated he would unveil reciprocal tariffs on Tuesday or Wednesday, targeting countries that impose similar duties on the U.S. This escalation in trade tensions heightened concerns over a global trade war, with China’s retaliatory tariffs on U.S. goods taking effect Monday. In commodities, gold rose 0.41% to $2,899.30, silver fell 0.47% to $32.29, copper decreased 0.69% to $9,399.20, and Brent oil surged 0.50% to $75.06.
Technical Update: The S&P/TSX Composite Index saw a slight dip of 0.36%, settling at 25,442.91, largely due to a 1.73% drop in the healthcare sector. While this decline may stir concerns in the short term, it's important to note that the broader market trend still remains positive, with the index staying above its 50-period Simple Moving Average (SMA). This suggests that the market's bullish momentum continues to hold, despite the recent pullback. Looking ahead, the 25,100 level stands as a critical support zone. If the index can maintain its position above this threshold, the potential for a rebound remains intact, supporting the outlook for continued bullishness. However, should the index break below this support, attention will shift to the 25,000 and 24,600 levels as the next key areas to watch. These zones will be pivotal in determining whether this current dip is a temporary setback or a signal of deeper market weakness. Investors should keep a close eye on these levels for further direction in the coming days.