TSX outpacing rival benchmarks

Despite low oil prices and the weak loonie, the TSX is currently outperforming many other global benchmarks, including the S&P 500, Dow, FTSE, DAX, Nikkei and Hang Seng, says Prab Sagoo, associate director at Nasdaq Advisory Services, in his weekly market commentary.

The main reason is the materials sector is benefiting from investors flocking to gold stocks, he adds, which is lifting the heavily weighted materials sector.

More highlights:

• As of the end of last week, the TSX was only down by 1.5%. That’s notable because the the exchange had dipped by more than 11% as of mid-January. Recent strength is due to investors flocking to gold. Read: Defensive gold boosting materials sector, says expert
• However, interest in short positions across TSX components jumped by 5% on average in the first half of February. This indicates that bearish pressure remains–shorts have increased on average every period so far this year and are up 16% year-to-date. Further, short bets against the iShares S&P/TSX 60 Index ETF (a proxy for large caps) continues to grow.
• This week will see little in the way of domestic economic releases, but will be very significant for earnings from Canadian banks. Banks account for a large part of overall TSX index weighting, so investors will be crutinizing results to determine how financial institutions are faring in this weak oil price environment. Read: Canadian banks’ Q1 earnings mixed

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.