The Canadian market clocks new highs

Image Souce: Krish Capital Pty Ltd

Index Update: The Canadian market climbed to a fresh record high on Thursday with stocks from materials and energy sectors moving higher on firm commodity prices. The benchmark S&P/TSX Composite Index, which surged to 24,561.20, settled with a gain of 129.28 points or 0.53% at 24,690.48.

Macro Update: Data showing an unexpected increase in U.S. retail sales, and a drop in U.S. jobless claims contributed as well to the positive mood in the market.

Top Movers: Onex Corporation (ONEX.TO) gained about 3.6%. GFL Environmental (GFL.TO), RB Global (RBA.TO), Cameco Corporation (CCO.TO), Imperial Oil (IMO.TO), Boyd Group Services (BYD.TO), Franco-Nevada Corporation (FNV.TO) and Senvest Capital (SEC.TO) climbed 1.5 to 3%.

Our Stance: From a technical analysis perspective, the index is currently trading above its 50-period Simple Moving Average (SMA), which typically indicates a bullish sentiment and suggests potential support around this level. The Relative Strength Index (RSI) at approximately 77.39 on the 14-period scale further supports this bullish momentum on the daily chart.

Commodity Update: On Friday, the dollar was set for its third consecutive weekly gain, supported by a dovish European Central Bank and robust U.S. data. This pushed back expectations for rate cuts, especially if Donald Trump wins the presidency. China’s economy grew 4.6% in Q3, but property investment fell over 10% in the first nine months, despite improved retail sales and industrial production in September. In commodities, gold rose 0.62% to $2,724.15 per ounce, silver surged 1.37% to $32.20, and Brent crude futures increased 0.2% to $74.61, driven by a surprise drop in U.S. oil inventories, though still facing weekly losses.

Technical Update: The S&P/TSX Composite Index experienced a notably bullish trading session, characterized by a substantial 129.28-point increase, closing at 24690.48 on Thursday, marking a 0.53% gain. This uptrend was accompanied by higher trading volume, indicating strong buying interest in the market. Sector-wise, energy stood out with an impressive 1.17% rise, reflecting robust performance in that sector. Technology also contributed positively, showing strength with a 0.43% increase. These sectoral movements suggest broad-based optimism and confidence among investors. From a technical analysis perspective, the index is currently trading above its 50-period Simple Moving Average (SMA), which typically indicates a bullish sentiment and suggests potential support around this level. The Relative Strength Index (RSI) at approximately 77.39 on the 14-period scale further supports this bullish momentum on the daily chart.