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Image Souce: Krish Capital Pty Ltd
Index Update: The Canadian market hit a new record high in early trades on Monday, but soon slipped and fell into negative territory and stayed weak right till the end of the session. The benchmark S&P/TSX Composite Index, which posted a new high at 25,843.20 early on in the session, closed down 66.38 points or 0.26% at 25,625.42.
Macro Update: Reports on the U.S consumer and producer price inflation, which are due to be released on Wednesday and Thursday, respectively, could impact the outlook for interest rates. While the Federal Reserve is widely expected to lower rates by another 25 basis points next week, there is some uncertainty about whether the central bank will continue cutting rates early next year.
Top Movers: Ssr Mining Inc (SSRM.TO), up 12.1%, was the top gainer in the Materials Capped Index. Fortuna Silver Mines (FVI.TO), Silvercrest Metals (SIL.TO), Orla Mining (OLA.TO), First Majestic Silver Corp (AG.TO), Torex Gold Resources (TXG.TO), Pan American Silver Corp (PAAS.TO), Eldorado Gold (ELD.TO), Ero Copper (ERO.TO), Hudbay Minerals (HBM.TO), Capstone Mining (CS.TO), Teck Resources (TECK.B.TO) and MAG Silver Corp (MAG.TO) gained 4 to 8%.
Our Stance: Key technical levels are in focus, with immediate support at 25,200. Holding above this level could pave the way for a rebound, while a breach could signal a deeper correction, with potential support zones at 25,200 and 24,900. 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 U.S. dollar reached its highest point this month against the yen on Tuesday, as investors awaited U.S. inflation data for clues on future Federal Reserve policy. Despite strong job growth in November, the unemployment rate rising to 4.2% pointed to a softer labour market, possibly prompting the Fed to cut rates soon. In the commodities market, gold rose by 0.55% to $2,689.60, silver dipped by 0.14% to $32.56, and copper fell 0.31% to $9,205.50. Brent crude dropped by 0.20% to $72.01, supported by geopolitical tensions and China's plans for more economic stimulus.
Technical Update: On Monday, the S&P/TSX Composite Index closed at 25,625.42, marking a decline of 0.26%. The utilities sector took the brunt of the pressure, falling by 1.29%, 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 71.14, 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 25,200. Holding above this level could pave the way for a rebound, while a breach could signal a deeper correction, with potential support zones at 25,200 and 24,900. 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.