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Image Souce: Krish Capital Pty Ltd
Index Update: The benchmark S&P/TSX Composite Index ended down 350.92 points or 1.43% at 24,156.87. The index tumbled to a low of 24,098.49, a three-week low, in the session.
Macro Update: Canada's GDP likely grew by 0.3% in September, data from Statistics Canada showed. Economic growth in August, however, was stagnant, consistent with preliminary estimates and market expectations.
Wages in Canada increased 4.6% in August 2024 over the same month in the previous year, a separate data from Statistics Canada said.
Top Movers: Morguard Corporation (MRC.TO) ended down 4.4%. West Fraser Timber (WFG.TO) lost 3.7%, while Constellation Software (CSU.TO), Canadian Tire Corporation (CTC.A.TO), Franco-Nevada Corporation (FNV.TO) and Descartes Systems Group (DSG.TO) lost 2.2 to 3.1%.
Our Stance: Looking ahead, the key level to watch is the immediate support at 23,880, where the index has a rising trendline. If the index can hold above this level, it could set the stage for a potential rebound. On the other hand, if the index breaks below this support, it may face stronger tests at lower support zones between 23,400 and 23,000. Such a move could signal deeper corrections and a shift in market sentiment. Investors should remain vigilant as these support levels will be crucial in determining the index’s short-term trajectory.
Commodity Update: The dollar stabilized against major currencies on Friday as investors awaited the U.S. jobs report, which is crucial for assessing economic resilience ahead of the Federal Reserve's monetary policy meeting and the upcoming presidential election. Economists expect October’s nonfarm payrolls to show an increase of 113,000 jobs, though recent hurricanes may affect this figure. In commodities, gold rose 0.33% to $2,758.50 per ounce, silver increased 0.10% to $32.83, and copper gained 0.14% to $9,568.50 per ton. Brent crude futures climbed 1.95% to $70.61 per barrel amid rising geopolitical tensions in the Middle East.
Technical Update: In Thursday's session, the S&P/TSX Composite Index fell by 350.92 points, closing at 24,156.87, which represents a decline of 1.43%. The technology sector led the downturn with a notable drop of 2.84%, intensifying the overall bearish mood in the market. Despite the drop, the index remains above its 50-period Simple Moving Average (SMA), suggesting that the short-term uptrend is still in play. However, with the Relative Strength Index (RSI) at 45.87, there are signs of underlying weakness, raising concerns about potential further declines. Looking ahead, the key level to watch is the immediate support at 23,880, where the index has a rising trendline. If the index can hold above this level, it could set the stage for a potential rebound. On the other hand, if the index breaks below this support, it may face stronger tests at lower support zones between 23,400 and 23,000. Such a move could signal deeper corrections and a shift in market sentiment. Investors should remain vigilant as these support levels will be crucial in determining the index’s short-term trajectory.