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Index Update: The benchmark S&P/TSX Composite Index ended the session with a gain of 110.05 points or 0.44% at 25,281.63.
Macro Update: Data from Statistics Canada showed the annual inflation rate in Canada eased to 1.8% in December from 1.9% in the previous month. The consumer price index in Canada decreased 0.4% month-over-month in December, after a flat reading in November.
Trump, who signed a slew of executive orders after taking charge, signaled imposition of tariffs on imports from Canada and Mexico, but refrained from enacting a policy.
Top Movers: Cameco Corporation (CCO.TO), Celestica Inc (CLS.TO) and Calian Group (CGY.TO) gained 3 to 3.3%. MTY Food Group (MTY.TO), Dollarama Inc (DOL.TO), goeasy (GSY.TO), Shopify Inc (SHOP.TO), Constellation Software (CSU.TO), CCL Industries (CCL.B.TO), West Fraser Timber (WFG.TO), Descartes Systems Group (DSG.TO), Wheaton Precious Metals (WPM.TO) and Imperial Oil (IMO.TO) advanced 1.5 to 3%.
Our Stance: The index is currently testing a critical support level near 24,800, and its ability to hold above this level will be pivotal in maintaining the upward momentum. A drop below this threshold could introduce retracement risks, with potential support zones on the weekly chart seen around 24,500 to 24,200. For the bullish outlook to remain intact, it is essential for the index to stay above these key support levels.
Commodity Update: The dollar dipped slightly in choppy trading on Wednesday, as markets awaited more details on President Donald Trump’s tariff strategy. Trump announced late Tuesday that his administration was considering a 10% tariff on Chinese imports starting February 1, coinciding with previously planned 25% tariffs on goods from Mexico and Canada. In commodities, gold rose by 0.17% to $2,763.70, silver climbed 0.13% to $31.54, while copper fell 0.45% to $9,250.00. Brent crude slipped by 0.01% to $79.26 per barrel as markets assessed the impact of Trump’s national energy emergency declaration on supply dynamics.
Technical Update: On Tuesday, the S&P/TSX Composite Index saw a notable gain, rising 110.05 points to finish at 25,281.63, reflecting a 0.44% increase. The day's positive performance was buoyed by robust trading volumes, underscoring continued investor confidence in the market. A key driver of the rally was the technology sector, which surged by 1.58%, pointing to optimism in the tech space and broader market sentiment. From a technical standpoint, the index remains in a favorable position, trading above its 21-period Simple Moving Average (SMA), signaling a sustained bullish trend. The Relative Strength Index (RSI) is at 59.10, indicating that the market is still strong but not yet overbought, which leaves room for further upside potential. The index is currently testing a critical support level near 24,800, and its ability to hold above this level will be pivotal in maintaining the upward momentum. A drop below this threshold could introduce retracement risks, with potential support zones on the weekly chart seen around 24,500 to 24,200. For the bullish outlook to remain intact, it is essential for the index to stay above these key support levels, which would help sustain growth in the near term and potentially pave the way for further advances.