Canadian stocks closed slightly higher on Monday

Index Update:  After opening just above previous week's close, the benchmark S&P/TSX Composite Index gave ground early in the session but then rebounded to finally close at 30,275.06, up by 14.32 points (or 0.05%).

Macro Update:  Data released by S&P Global revealed that Canada's Manufacturing PMI rose to 49.6 in October from 47.7 in September, indicating a somewhat slower contraction since January. Furthermore, Xi invited Carney to visit China, a request which Carney readily accepted. Carney emphasized that constructive and pragmatic dialogue is the proper route to address current issues. Today Canada's Minister of Finance and National Revenue, François-Philippe Champagne, will table Budget 2025.

Top Movers:  Among the individual stocks, Magna International Inc (4.53%), Pet Valu Holdings Ltd (2.59%), Aritizia Inc (2.39%), and Manulife Fin (2.27%) were the prominent gainers.

Our Stance:  Currently, the index is consolidating near a critical support zone around 30,100. Sustaining levels above this area will be essential to maintain market confidence and preserve the broader upward trend. However, a decisive breakdown below this support could indicate fading bullish momentum and open the door for a potential retracement toward 30,000 and 29,800. 

Commodity Update:  The dollar held firm near a three-month high on Tuesday as a divided Federal Reserve prompted traders to scale back rate cut expectations. Investors also awaited the Reserve Bank of Australia’s policy decision, with rates expected to remain unchanged. Gold slipped 0.54% to USD 3,992.20 per ounce, silver fell 0.80% to USD 47.66, and copper declined 0.61% to USD 10,778.00. Brent crude eased 0.10% to USD 64.80 amid OPEC+ output concerns.

Technical Update:   

On Monday, the S&P/TSX Composite Index advanced 14.32 points, or 0.05%, to close at 30,275.06. The modest gain was supported by strong trading volumes, underscoring sustained investor confidence and reinforcing the prevailing bullish momentum. From a technical perspective, the index continues to trade within a well-defined uptrend, holding comfortably above its 21-period Simple Moving Average (SMA), which remains a key dynamic support level. Momentum indicators also present a constructive outlook, with the 14-period Relative Strength Index (RSI) at 54.65, reflecting persistent buying pressure. Currently, the index is consolidating near a critical support zone around 30,100. Sustaining levels above this area will be essential to maintain market confidence and preserve the broader upward trend. However, a decisive breakdown below this support could indicate fading bullish momentum and open the door for a potential retracement toward 30,000 and 29,800.