Canadian Stocks Pull Backed on Monday

Index Update:  Canadian stocks moved to the downside on Monday as investors resorted to booking profits from record highs from Friday while refraining from making big moves ahead of the upcoming monetary policy meeting by the U.S. Federal Reserve. After opening below the previous week's close, the benchmark S&P/TSX Composite Index traded firmly negative throughout the session before closing at 31,101.78, down by 281 points (or 0.90%). Last Friday, the index settled at a new record closing high of 31,382.78.

Macro Update:  Last week, at an industry event organized in Calgary, Canadian Prime Minister Mark Carney stated that U.S. tariffs and the consequent uncertainty are set to wipe out $50 billion (roughly $1,300 for every Canadian) from the national economy. The S&P Global Canada manufacturing Purchasing Managers' Index fell to 48.4 in November from 49.6 in October, indicating a contraction of the sector for the tenth straight month. Employment registered a modest decline with firms hesitant to replace quitting employees. To support the economy, the Bank of Canada lowered interest rates by a quarter point to 2.25% in late October. At the time of  nnouncement, central bank Governor Tiff Macklem was noncommittal about future cuts. Last week's data released by Statistics Canada revealed that the economy managed to avoid a recession in the third quarter after the GDP rebounded 2.6% year-over-year after falling 1.8% in the second quarter. The data has reinforced economists' view that Canada's central bank would not institute another rate cut in its December meeting.

Top Movers:  Among the individual stocks, Bausch Health Companies Inc (11.26%), Curaleaf Holdings Inc (4.63%), Nutrien Ltd (3.63%), International Petroleum Corp (1.45%), and Arc Resources Ltd (1.36%) were the prominent gainers.

Our Stance:  Momentum conditions remain steady, with the 14-period RSI around 60.22, reflecting neutral-to-positive momentum. On the downside, immediate support is located near 31,000, a level bulls must defend to prevent deeper downside pressure. A decisive break below this support could expose the index to further declines toward 30,800 and 30,600.

Commodity Update:  The U.S. dollar stayed weak on Tuesday after disappointing U.S. manufacturing data increased expectations of a Fed rate cut later this month. Gold edged down 0.44% to USD 4,255.35, silver dropped 2.05% to USD 57.92, and copper slipped 0.88% to USD 11,163. Brent crude rose 0.10% to USD 63.23, supported by OPEC+’s decision to pause production hikes and ongoing geopolitical supply concerns.

Technical Update:

The S&P/TSX Composite Index declined 281 points (−0.90%) on Monday to close at 30,101.78, with light profit-taking weighing on sentiment. Despite the pullback, the broader technical outlook remains constructive. The index continues to trade comfortably above its 50-period Simple Moving Average (SMA) a key dynamic support that has been reinforcing the short-term uptrend and signaling ongoing buyer control. Momentum conditions remain steady, with the 14-period RSI around 60.22, reflecting neutral-to-positive momentum. On the downside, immediate support is located near 31,000, a level bulls must defend to prevent deeper downside pressure. A decisive break below this support could expose the index to further declines toward 30,800 and 30,600.