Canadian stocks turned lower on Friday

Image Source : Krish Capital Pty Ltd

Index Update:  Canadian stocks turned lower on Friday as US President Donald Trump suddenly intensified his tariff pressure on Canada. The benchmark S&P/TSX Composite Index moved lower and after swinging until post noon, managed to settle at 27,023.25, down by 59.05 (or 0.22 %).

Macro Update:  Canadian PM Mark Carney has stated in response that Canada would continue to defend workers and businesses even as it continues negotiations with the US ahead of the August 1 deadline. Blaming Canada for failing to check illicit drug entry via Canadian borders into the US, Trump announced plans to impose a 35% levy on imports from Canada starting next month. It is an increase from the current 25% imposed in March. He also added that any counter-tariff by Canada will be met by re-imposing the same number on Canada over and top of the 35%. Jobs data released by Statistics Canada today revealed that the unemployment rate eased to 6.9% in June from 7% in the previous month. Total employment grew by 83,100 jobs.

Top Movers:  Kelt Exploration Ltd (3.93%), Advantage Oil & Gas Ltd (2.41%), Aya Gold and Silver Inc (9.25%), and First Majestic Silver Corp (7.36%) were the prominent gainers.

Our Stance:  From a technical perspective, attention now turns to key support levels. The index continues to hold above the near-term support zone at 26,800 a critical threshold for maintaining bullish momentum. If this level holds, it could attract renewed buying interest and set the stage for a potential rebound toward recent highs. However, a decisive break below 26,800 may intensify selling pressure, potentially signaling a deeper correction ahead.

Commodity Update:  The euro dropped to a three-week low Monday, and the Mexican peso weakened after President Trump threatened 30% tariffs on EU and Mexican imports starting August 1. Gold rose 0.27% to $3,373.15, silver gained 0.45% to $39.12, and copper edged up 0.13% to $9,681.35. Brent crude climbed 0.20% to $70.48 amid tariff tensions and potential new U.S. sanctions on Russia, extending its weekly gains.

Technical Update:  On Friday, the S&P/TSX Composite Index posted a modest retreat, slipping 59.05 points, or approximately 0.22%, to close at 27,023.25. The decline was primarily driven by a broad-based weakness in the healthcare sector, which fell by a notable 2.35%. Despite this pullback, the index remains comfortably above its 50-period Simple Moving Average (SMA), a key technical indicator that often acts as dynamic support during trending markets. This positioning suggests the short-term uptrend remains intact, and the recent dip may represent healthy consolidation rather than the beginning of a broader reversal. From a technical perspective, attention now turns to key support levels. The index continues to hold above the near-term support zone at 26,800 a critical threshold for maintaining bullish momentum. If this level holds, it could attract renewed buying interest and set the stage for a potential rebound toward recent highs. However, a decisive break below 26,800 may intensify selling pressure, potentially signaling a deeper correction ahead.