Canadian stocks add $ 191 billion in value to longest rally on record

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The Canadian stock market posted its longest streak to date as a rally in commodities pushed the benchmark higher for a 14th consecutive session.

The S & P / TSX Composite Index rose 0.3% to an all-time high on Monday. He added about US $ 237 billion (US $ 191 billion) in market value during his recent winning streak, according to data compiled by Bloomberg. Oil prices in the United States hit US $ 85 a barrel for the first time since 2014 and metal prices also climbed, fueling Monday’s rally. Energy and materials make up about 25 percent of the Canadian benchmark.

“The TSX is one of the best inflation hedges you can find,” Stefane Marion, chief economist and strategist at National Bank of Canada, said over the phone. In a recent analysis, Marion found that the S & P / TSX posted an annualized return of 2.3% during periods of inflation due to its exposure to commodities, compared to a 5.9% decline for the S&P 500.

The Canadian stock market has been in tears amid a surge in cyclical and value stocks as the country’s economy reopens thanks to a declining COVID-19 pandemic. Energy, real estate and financials are the biggest winners in the S & P / TSX this year.

Last week, the country’s most populous province unveiled a plan to lift all public health restrictions linked to the pandemic over the next six months, paving the way for residents to return to normal life.

Foreign investors are also bullish on the country’s stock market. They added over US $ 22 billion at the end of August, partly due to the rise in cyclical stocks and also due to a strong Canadian dollar. The loonie is the best performing currency against the US dollar among its G-10 peers this year, rising about 2.7%.

While the S & P / TSX has gained 22.1 percent this year, slightly outpacing the 21.6 percent advance of the S&P 500, Canadian stocks are still cheap relative to the United States. times for the S&P 500.


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