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Index Update: The market digested the nation's consumer price inflation data and looked ahead to the U.S. Federal Reserve's monetary policy announcement on Wednesday. The benchmark S&P/TSX Composite Index ended with a marginal loss of 27.50 points or 0.11% at 25,119.71, recovering gradually from an early low of 25,008.08.
Macro Update: Data from Statistics Canada said the annual inflation rate in Canada was at 1.9% in November, easing from 2% in the previous month.
The annual core inflation rate in Canada eased to 1.6% in November, from 1.7% in the prior month. On a monthly basis, core consumer prices fell by 0.1% in November, after a 0.4% increase in the prior month.
Top Movers: Hut 8 Corp (HUT.TO), AtkinsRealis (ATRL.TO), Methanex Corporation (MX.TO), BRP Inc (DOO.TO), Lightspeed Commerce (LSPD.TO), Badger Infrastructure (BDGI.TO), Enghouse Systems (ENGH.TO) climbed 1.8 to 3%.
Our Stance: Traders are closely watching critical technical levels for signs of the market's direction. Immediate support lies at 24,900, which could act as a buffer against further declines. If the index holds above this level, there could be a chance for a rebound, particularly if the energy sector stabilizes. On the other hand, if the index falls below the 24,900 level, it could indicate further weakness, with additional support at lower levels.
Commodity Update: The U.S. dollar reached new highs against the Australian and New Zealand dollars on Wednesday as traders anticipated an upcoming U.S. interest rate cut. In the commodities market, gold inched up by 0.01% to $2,662.50 per ounce, while silver dropped 0.04% to $30.91, and copper fell 0.22% to $8,989.50 per ton. Oil prices were stable, with Brent crude rising 0.16% to $73.31 per barrel. Market sentiment was cautious ahead of interest rate cuts, while U.S. inventory data offered mixed signals. Concerns about weakening demand in China and a potential supply glut dampened oil's recent momentum.
Technical Update: The S&P/TSX Composite Index closed at 25,119.71 on Tuesday, marking a 0.11% decline, largely driven by a 0.67% pullback in the energy sector. This sector weakness had a broader impact on the market. Despite this, the index remains above its 50-period Simple Moving Average (SMA), indicating that the short-term uptrend remains intact for now. However, the decline in the Relative Strength Index (RSI) to 44.30 suggests that bullish momentum is fading. Traders are closely watching critical technical levels for signs of the market's direction. Immediate support lies at 24,900, which could act as a buffer against further declines. If the index holds above this level, there could be a chance for a rebound, particularly if the energy sector stabilizes. On the other hand, if the index falls below the 24,900 level, it could indicate further weakness, with additional support at lower levels. The market is at a crucial juncture, and these technical levels will likely determine whether the current trend continues, or a reversal is in store.