Investors can expect a slight uptick in volatility and volumes at the end this week, says Prab Sagoo, associate director at Nasdaq Advisory Services, in his weekly market commentary.

Read: When buy-and-hold portfolios aren’t enough

That’s because “a number of TSX indices, including the TSX Composite, will undergo a rebalancing due to the removal of Rona following its takeover by Lowe’s,” he adds.

Read: Canada’s M&A appetite remains strong

More highlights

  • The TSX managed small gains last week even though it was held down by some weakness in gold prices, which dragged on the outperforming materials space. But the index still outperformed the S&P 500. The Canadian dollar weakened against the U.S. dollar slightly, though the currency will undoubtedly be supported by continued strength in oil prices. Read: Oil: Buy high and sell low?
  • Domestically, we have some important data releases on the cards: manufacturing data comes out on Tuesday– there has been some signs of a slight slowdown here. Later on, the highlights will include retail (might weaken following a higher than expected reading last month) and inflation data.
  • The TSX is seeing some positive technical signals with its 50-day moving average having made a positive break past its 200-day average recently; however, defensive sectors had seen some of the most positive momentum in the last two weeks.
  • Initial data indicates that there was likely an uptick in short interest activity in the first half of May across TSX Composite constituents.