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The Canadian market closed weak on Monday

By: Team Kalkine | Dec 03, 2024 | Read Time : 10 Mins
The Canadian market closed weak on Monday

Image Souce: Krish Capital Pty Ltd

Index Update: The benchmark S&P/TSX Composite Index closed down 57.67 points or 0.22% at 25,590.33, after scaling a low of 25,492.57 and a high of 25,706.50 intraday.

Macro Update: On the economic front, the S&P Global Canada Manufacturing PMI improved to 52.0 in November 2024, up from 51.1 in October, marking the strongest growth in factory activity since February 2023 and the third consecutive month of expansion.

Top Movers: Methanex Corporation (MX.TO), Nutrien (NTR.TO), Dayforce (DAY.TO), BRP Inc (DOO.TO), Linamar Corporation (LNR.TO), Canadian Western Bank (CWB.TO), Loblaw (L.TO), Alimentation Couche-Tard (ATD.TO), Thomson Reuters (TRI.TO), Constellation Software (CSU.TO), Gildan Activewear (GIL.TO) and Fairfax Financial Holdings (FFH.TO) closed up 1 to 3.2%.

Our Stance: Key technical levels are in focus, with immediate support at 24,900. Holding above this level could pave the way for a rebound, while a breach could signal a deeper correction, with potential support zones at 25,000 and 24,600. As we move forward, market participants will likely be cautious, balancing optimism with the need for caution given the mixed signals in both the broader market and individual sectors.

Commodity Update: The dollar strengthened on Tuesday amid political unrest in France, which pressured the euro. At the same time, concerns over China's economic slowdown and tariff risks pushed the yuan to a one-year low. Investors are eyeing U.S. employment data on Friday, which could influence expectations on a potential Federal Reserve rate cut later this month, currently priced at a 50% chance. In commodities, gold rose 0.10% to $2,661.10, silver climbed 0.47% to $31.00, and copper dropped 0.32% to $8,975.50. Brent crude slipped 0.13% to $71.74 per barrel, with OPEC+ expected to extend output cuts through Q1 2025.

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Technical Update: On Monday, the S&P/TSX Composite Index closed at 25, 590.33, marking a decline of 0.22%. The energy sector took the brunt of the pressure, falling by 0.77%, which weighed on the broader market sentiment. Despite the pullback, the index remains comfortably above its 21-period Simple Moving Average (SMA), signaling that the short-term uptrend is still intact. However, the Relative Strength Index (RSI) is now at a relatively high 73.78, suggesting the market may be in overbought territory. This could point to a potential softening in momentum, and traders should watch closely for signs of a shift in market dynamics. Key technical levels are in focus, with immediate support at 24,900. Holding above this level could pave the way for a rebound, while a breach could signal a deeper correction, with potential support zones at 25,000 and 24,600. As we move forward, market participants will likely be cautious, balancing optimism with the need for caution given the mixed signals in both the broader market and individual sectors.


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