Canadian stocks hit new record highs

Source: Krish Capital Pty Ltd

Index Update:

After opening just above the previous session's record close, the benchmark S&P/TSX Composite Index fell to an intraday low of 28,893.86 within an hour. The index remained in negative territory for the rest of the day before closing at 29,027.73, down by 22.90 points (or 0.08%).

Macro Update:

Last week, data revealed by Statistics Canada showed that the unemployment rate has increased 0.2 percentage points to 7.1% in August, the highest level in four years and above market expectations of 7%.

The number of unemployed people increased to about 1.595 million. Youth unemployment remained elevated at 14.5%, largely due to slow hiring for seasonal summer jobs.

As Canada had two back-to-back months of job losses, expectations have increased of a rate cut by Bank of Canada in their upcoming September meeting next week. On the other hand, since March, the BoC has kept rates steady at 2.75% at its last three meetings.

Top Movers:

Among the individual stocks, G Mining Ventures Corp (4.07%), Hudbay Minerals Inc (3.35%), Pan American Silver Corp (3.11%), Allied Properties REIT (2.94%), and Sienna Senior Living Inc (1.55%) were the prominent gainers.

Our Stance:

The index is currently testing a key support zone near 28,800, a level that will be critical to maintaining the ongoing upward trajectory. A decisive break below this zone could trigger a deeper retracement, with subsequent supports seen at 28,600 and 28,500. Holding these levels will be essential to preserving the near-term bullish outlook.

Commodity Update:

The dollar slipped to a nearly seven-week low on Tuesday as markets awaited U.S. data revisions that may reveal deeper labour market weakness, strengthening the case for sharper Federal Reserve rate cuts. Commodities advanced, with gold up 0.28% at $3,687.50, silver rising 0.25% to $42.00, and copper gaining 0.30% at $9,952.60. Brent crude added 0.20% to $66.17, supported by limited OPEC+ output hikes and renewed sanctions concerns on Russia.

Technical Update:

The S&P/TSX Composite Index slipped 22.90 points, or 0.08%, on Monday to close at 29,027.73, with industrial stocks weighing on sentiment after a 1.02% decline. Despite the modest pullback, the broader technical outlook remains constructive, as the index continues to trade above its 50-period Simple Moving Average (SMA), reinforcing the prevailing bullish trend. Momentum indicators also remain supportive, with the Relative Strength Index (RSI) at an elevated 78.46, underscoring strong underlying strength. The index is currently testing a key support zone near 28,800, a level that will be critical to maintaining the ongoing upward trajectory. A decisive break below this zone could trigger a deeper retracement, with subsequent supports seen at 28,600 and 28,500. Holding these levels will be essential to preserving the near-term bullish outlook.