The Canadian market closed on a positive note on Thursday as Fed Lowers Rates

Image Souce: Krish Capital Pty Ltd

Index Update:  Canadian stocks moved mostly higher during trading on Thursday, extending the upward move seen over the two previous sessions. The benchmark S&P/TSX Composite Index advanced early in the session and saw further upside in the latter part of the session. The index ended the day up 208.48 points or 0.9 percent at a new record closing high of 24,845.93.

Macro Update: After aggressively slashing interest rates by half a percentage point in September, the Fed said it has decided to lower the target range for the federal funds rate by 25 basis points to 4.50 to 4.75 percent.

The central bank said its decision to continue lowering rates comes as labor market conditions have generally eased, while inflation continues to make progress towards its 2 percent objective.

Top Movers: Technology stocks moved sharply higher along with their U.S. peers, driving the S&P/TSX Capped Information Technology Index up by 1.7 percent. A sharp increase by the price of gold also contributed to considerable strength among gold stocks, as reflected by the 1.4 percent gain posted by the S&P/TSX Global Gold Index.

Our Stance: the index is currently at a critical juncture, testing a support level around 23,850. Maintaining this level is vital for sustaining the current upward trend; a breach below could signal a pullback, with significant support levels between 23,400 and 23,000.

Commodity Update: The dollar paused on Friday, poised for a slight weekly gain as markets assessed the potential economic impact of Donald Trump's possible return to the White House. Investors also eyed Beijing's conclusion of its five-day NPC meeting, expecting further details on China's stimulus measures, which could support the yuan and Antipodean currencies. Commodities showed mixed performance: gold dipped 0.01% to $2,605.70/oz, silver rose 0.12% to $31.90, and copper fell 0.42% to $9,645.50/ton. Crude oil slipped 0.3% to $75.44 a barrel, though was set for a positive weekly outcome due to OPEC+'s delayed production hikes and U.S. supply concerns.

Technical Update: On Thursday, the S&P/TSX Composite Index demonstrated robust performance, climbing 208.48 points to close at 24,845.93, a notable increase of 0.85%. This rise reflects strong sentiment among investors, supported by healthy trading volumes. The technology sector was a key driver of this upward movement, gaining 1.66%, which indicates a positive shift in market dynamics. From a technical perspective, the index remains firmly above its 21-period Simple Moving Average (SMA), reinforcing a bullish outlook. The Relative Strength Index (RSI) currently sits at 74.43, pointing to a healthy market condition that may allow for further gains. However, the index is currently at a critical juncture, testing a support level around 23,850. Maintaining this level is vital for sustaining the current upward trend; a breach below could signal a pullback, with significant support levels between 23,400 and 23,000.