Canadian stocks advanced on Wednesday

Index Update:  Canadian stocks advanced on Wednesday, driven by an increase in gold prices due to safe-haven demand that consequently pushed up materials sector as well as a jump by IT stocks ahead of AI-giant Nvidia's earnings. After opening above yesterday's close, the benchmark S&P/TSX Composite Index remained volatile throughout the session before finally settling at 30,278.41, up by 241.95 points (or 0.81%)

Macro Update:  After successfully securing enough votes to pass his first budget in the parliament, Canadian Prime Minister Mark Carney is heading to the U.A.E. to seek investments from sovereign wealth funds and the private sector to strengthen the Canadian economy that is suffering from the U.S. trade war. Data released by Statistics Canada on Monday showed that the headline inflation rate in Canada fell to 2.20% in October from 2.40% in the previous month. The trimmed-mean core inflation rate which is closely tracked by the Bank of Canada inched down to 3.00% from 3.10% in September. Annual core inflation inched up to 2.90% from 2.80% in September. As the dip in inflation was largely due to a slide in food prices and gasoline prices, economists have lowered their expectations for another rate cut by BoC in its upcoming meeting next month.

Top Movers:  Among the individual stocks, Mda Ltd (5.50%), Celestica Inc (4.90%), Shopify Inc (4.60%), Quarterhill Inc (3.30%), G Mining Ventures Corp (5.37%), Skeena Resources Ltd (4.74%), and Ero Copper Corp (3.90%) were the prominent gainers.

Our Stance:  Currently, the index is consolidating near a key support zone around 30,200. Sustained trading above this level will be crucial to maintain positive sentiment and preserve the broader uptrend. However, a decisive move below this area could indicate fading momentum and potentially open the door for a pullback toward 30,000 and 29,800.

Commodity Update:  The U.S. dollar held steady in early Asian trade on Thursday as investors awaited key payroll data and reassessed expectations of Fed rate cuts. Gold dipped 0.15% to USD 4,076.90, while silver rose 0.68% to USD 51.20 and copper edged up 0.23% to USD 10,782.05. Brent crude gained 0.30% to USD 63.71 following a sharp drop in U.S. inventories, amid reports of a potential new U.S.–Russia peace plan for Ukraine.

Technical Update: 

On Wednesday, the S&P/TSX Composite Index advanced 241.95 points, or 0.81%, to close at 30,278.41. The rise was supported by robust trading volumes, underscoring firm investor confidence and reinforcing the prevailing bullish momentum. From a technical standpoint, the index continues to trend higher, trading comfortably above its 50-period Simple Moving Average (SMA), which remains an important dynamic support. Momentum signals also point to a healthy backdrop, with the 14-period Relative Strength Index (RSI) at 52.28, reflecting steady buying interest without signs of overextension. Currently, the index is consolidating near a key support zone around 30,200. Sustained trading above this level will be crucial to maintain positive sentiment and preserve the broader uptrend. However, a decisive move below this area could indicate fading momentum and potentially open the door for a pullback toward 30,000 and 29,800.