Canadian stocks gained sharply on Thursday

Index Update:  Canadian stocks gained sharply on Thursday after Canadian lenders posted strong quarterly results, signaling underlying resilience in the economy despite the damage due to U.S. tariffs, along with reinforced expectations of a Federal Reserve rate cut next week. After opening above yesterday's close, the benchmark S&P/TSX Composite Index gained momentum to trade firmly positive throughout the session before settling at 31,477.57, up by 317.03 points (or 1.02%).

Macro Update:  Data from Ivey Business School revealed that the Purchasing Managers' Index (PMI) tumbled to 48.4 in November from 52.4 in October, indicating the first contraction after five consecutive months of expanding economic activity. Expectations of a rate cut by the U.S. Federal Reserve based on recent employment data have increased in the U.S. In Canada, analysts feel that the Bank of Canada would keep its policy rate on hold despite the weakness in domestic demand as inflationary pressures remain.

Top Movers:  Among the individual stocks, Curaleaf Holdings Inc (9.73%), Bausch Health Companies Inc (4.77%), Descartes Sys (14.37%), Celestica Inc (4.64%), Eqb Inc (12.85%), and Mda Ltd (9.79%) were the prominent gainers

Our Stance:  Price action is currently consolidating near an important support zone around 31,400. Holding above this level will be critical for maintaining positive sentiment and preserving the broader upward trend. Conversely, a decisive breakdown below this support could signal weakening momentum and open the door for a potential pullback toward 31,200 and 31,100.

Commodity Update:  The U.S. dollar hovered near a five-week low as traders awaited next week’s Federal Reserve meeting, where a quarter-point rate cut is widely expected. Markets will watch for clues on the pace of future easing. Gold slipped 0.21% to USD 4,234.15, while silver rose 0.99% to USD 58.06 and copper gained 1.08% to USD 11,568.50. Brent crude inched up 0.09% to USD 63.32, supported by rate-cut expectations and rising geopolitical tensions.

Technical Update:

On Thursday, the S&P/TSX Composite Index climbed 317.03 points, or 1.02%, to close at 31,477.57. The advance was supported by healthy trading volumes, reflecting strong investor confidence and reinforcing the prevailing bullish momentum. From a technical perspective, the index continues to trade comfortably above its 21-period Simple Moving Average (SMA), which remains a key dynamic support and confirms the strength of the short-term uptrend. Momentum conditions also remain favorable, with the 14-period Relative Strength Index (RSI) holding at 64.71, indicating sustained buying pressure. Price action is currently consolidating near an important support zone around 31,400. Holding above this level will be critical for maintaining positive sentiment and preserving the broader upward trend. Conversely, a decisive breakdown below this support could signal weakening momentum and open the door for a potential pullback toward 31,200 and 31,100.