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Index Update: The Canadian market closed weak on Monday, extending losses to a third straight session as weak oil and gold prices weighed on energy and materials stocks. The benchmark S&P/TSX Composite Index closed down 127.09 points or 0.5% at 25,147.21.
Macro Update: A report from the Canada Mortgage and Housing Corporation said housing starts in Canada rose by 8.4% month-over-month to 262,400 units in November, the highest level in four months.
Investors awaited the Federal Reserve's monetary policy announcement, and a slew of key economic data, including reports on Canadian inflation and retail sales reports, and U.S. inflation readings.
Top Movers: Hut 8 Corp (HUT.TO) rallied nearly 6.5%. Aritzia Inc (ATZ.TO), Jamieson Wellness (JWEL.TO), Brookfield Asset Management (BAM.TO), ATCO Ltd. (ACO.Y.TO), TerraVest Industries (TVA.TO), Boyd Group Services (BYD.TO), GFL Environmental (GFL.TO) and Toromont Industries (TIH.TO) gained 1.5 to 2.7%.
Our Stance: Traders are now closely monitoring key technical levels to gauge the market’s direction. The immediate support for the index lies at 24,900, which may offer some protection against further declines. If the index can hold above this level, there is potential for a rebound, particularly if sectors like energy show signs of stabilization.
Commodity Update: The U.S. dollar remained stable on Tuesday as traders anticipated key central bank meetings this week, including a likely rate cut by the U.S. Federal Reserve and a hold decision by the Bank of Japan. In the commodities market, gold edged up by 0.05% to $2,671.70 per ounce, while silver dropped 0.28% to $30.97 per ounce, and copper fell slightly by 0.02% to $9,069.00 per ton. Oil prices were muted, with Brent crude slipping 0.20% to $73.81 per barrel, as weak economic data from China weighed on market sentiment ahead of the Fed's upcoming policy meeting.
Technical Update: On Monday, the S&P/TSX Composite Index closed at 25,147.21, reflecting a 0.50% decline. This drop was primarily driven by a 1.82% pullback in the energy sector, which weighed on the broader market. Despite the decline, the index remains above its 50-period Simple Moving Average (SMA), suggesting that the short-term uptrend is still intact. However, momentum appears to be waning, as evidenced by the dip in the Relative Strength Index (RSI) to 45.25, signaling a loss of bullish momentum. Traders are now closely monitoring key technical levels to gauge the market’s direction. The immediate support for the index lies at 24,900, which may offer some protection against further declines. If the index can hold above this level, there is potential for a rebound, particularly if sectors like energy show signs of stabilization. Conversely, a break below the 24,900 mark could signal deeper market weakness, with additional support zones at 24,900. As the market faces this uncertainty, these critical levels will be pivotal for determining whether the current trend will continue or if a reversal is on the horizon.