Canadian stocks surged on Wednesday

Index Update:   Canadian stocks surged on Wednesday as political developments in the U.S. to end the shutdown revived market sentiments and improved risk appetite both in the U.S. and Canada. After opening just above yesterday's close, the benchmark S&P/TSX Composite Index moved steadily higher over the course of the morning and remained firmly positive throughout the after before finally closing at 30,827.58, up by 418.33 (or 1.38%)

Macro Update:  Even while the shutdown in the U.S. entered day number 43, attempts that started Sunday night to end the government closure appear to be bearing fruit. Monday's Senate-advanced short-term funding bill to run the government through January 30 that was formulated by the Republicans with the support of several Democrats is now in the lower house of the U.S. congress. After successful passing, it moves to the president's table for his signature. Yesterday's weekly update of U.S. ADP's preliminary payroll figures indicated that for the four weeks ending October 25, private employers shed an average of 11,250 jobs a week pointing to continued weakness in the labor market.

Top Movers:  Among the individual stocks, Orla Mining Ltd (13.63%), Discovery Silver Corp (8.37%), Ccl Industries Inc (7.33%), Equinox Gold Corp (6.11%), George Weston Limited (3.94%), Loblaw CO (3.70%), Bombardier Inc (6.48%), and TMX Group Ltd (4.08%) were the prominent gainers.

Our Stance:  At present, the index is consolidating near a crucial support zone around 30,700. Maintaining closes above this level will be key to sustaining positive sentiment and preserving the broader upward trajectory. Conversely, a decisive breakdown below 30,700 could signal a loss of momentum and open the door for a potential pullback toward 30,500 and 30,300.

Commodity Update:  The yen hovered near a record low against the euro and a nine-month low versus the dollar after Japan’s new prime minister urged the central bank to proceed cautiously on rate hikes. Gold slipped 0.25% to USD 4,202.90 per ounce, while silver and copper edged higher. Brent crude dipped 0.03% to USD 62.69 as rising U.S. inventories fueled concerns over ample global supply amid subdued demand.

Technical Update:

On Wednesday, the S&P/TSX Composite Index advanced 418.33 points, or 1.38%, to close at 30,827.58. The rally was supported by strong trading volumes, signaling sustained investor confidence and reinforcing the prevailing bullish momentum. From a technical standpoint, the index remains in a well-defined uptrend, trading comfortably above its 21-period Simple Moving Average (SMA), which continues to serve as a dynamic support level. Momentum indicators further underscore this constructive outlook, with the 14-period Relative Strength Index (RSI) at 62.36, reflecting consistent buying interest. At present, the index is consolidating near a crucial support zone around 30,700. Maintaining closes above this level will be key to sustaining positive sentiment and preserving the broader upward trajectory. Conversely, a decisive breakdown below 30,700 could signal a loss of momentum and open the door for a potential pullback toward 30,500 and 30,300.