The TSX Composite Index crashed last week and bottomed at $26,845, its lowest level since June 30th. It has plunged by over 2.63% from its highest point this year. This article explores some of the top catalysts this week and the key stocks to watch.
Top TSX earnings to watch
Several TSX Composite companies will publish their financial results this week. The first major firm to watch will be Suncor Energy, which will publish its results on Tuesday.
These numbers come at a time when the Suncor Energy stock price has jumped by over 24% from its lowest point this year.
Great West Lifeco, Industrial Allianc, and Finning International will publish their financial results this week.
The other notable companies to watch will be Shopify, Manulife, and Nutrien, which will release their numbers on Wednesday. Shopify is one of the biggest companies in Canada and is a core part of the TSX Index.
The other top companies to publish their results this week are Canadian Natural Resources, Wheaton Precious Metals, Sun Life Financial, Power of Canada, Restaurant Brands, and Constellation Software.
US and Canadian trade war
The other notable catalyst for the TSX Composite will be the ongoing US-Canadian trade war. In a statement last week, Trump said that he would implement a 35% tariff on goods shipped to the United States, a move that will disrupt trade volume worth close to $1 trillion a year.
Canada is still subject to a 25% tariff on steel and aluminium and a similar one on automakers. In a statement, Canada’s trade minister said that he remained optimistic that the two sides will reach an agreement.
A comprehensive trade deal between the two countries would be bullish for the TSX Composite Index.
Canada jobs data
The other key catalyst for the TSX Composite Index is the country’s jobs numbers scheduled on Friday this week. Economists expect these numbers to show that the economy created 15.3k jobs in July, a big drop from the 83.1k that it created in the previous month.
The Canadian unemployment rate is expected to move upward to 7% from the previous 6.9%. These numbers come a week after the Bank of Canada (BoC) delivered its interest rate decision.
The bank left interest rates unchanged at 2.75%. Officials, led by Governot Tiff Macklem, left the door for an interest rate cut open. In a nite, an analyst said:
“The bank appears to be getting a little more comfortable with the notion that the Canadian economy will need the support from further interest rate cuts in the future. Upcoming data will remain more important that today’s slight change in language.”
TSX Composite Index analysis
The daily chart shows that the TSX Index surged to a record high in July, and then pulled back to $26,836. It remains above the 50-day moving average at $26,740.
The stock also remains above the crucial support level at $25,877, the highest point in December and January. Therefore, the most likely scenario is where the stock resumes the uptrend as Canada and the US will likely reach an agreement. A rebound may have it jump to the resistance at $27,560.
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