Canada’s main stock market has had a pretty good year and much of that momentum has come from the yellow metal.
Gold stocks, benefiting from a historic run-up in
gold prices
, now account for more than 12 per cent of the market capitalization of the
S&P/TSX
Composite Index, the highest share on record and well above the historical average of 4.8 per cent since the mid 1970s, said National Bank of Canada strategists.
Year to date the TSX boasts returns of 30 per cent, and is on track for the record annual return of 35.1 per cent, set in 2009. For the first time since 2016, the Toronto index is beating the S&P 500 in a rising market, Bloomberg reports.
Banks and materials have both outperformed the index, with banks delivering a 37 per cent return year to date and materials, which includes gold stocks, a whopping 95.3 per cent.
But the strategists led by Stéfane Marion say there could be more than gold supporting the TSX next year.
They believe that the
federal budget
delivered on Nov. 4 signalled a more practical approach towards conventional energy within Canada’s industrial strategy, a policy shift that was reinforced by the
memorandum of understanding
signed by Alberta and Canada later that month.
That agreement will allow the province to develop its fossil fuel industry without a federal emissions gap.
“We view this agreement as foundational to making Canada investable again,” said the strategists.
“The fact that oil & gas sector is no longer treated as a stranded asset could meaningfully reignite investor interest in the S&P/TSX energy complex and, over time, foster a renewed wave of foreign direct investment into Canada.”
National’s asset allocation remains underweight in equities, particularly in the U.S., where analysts believe high valuations and volatility will make gains more difficult.
Canada, however, should continue to power ahead, even though valuations have moved above their long-term averages, and National recommends being overweight in energy equipment & services and in oil, gas and consumable fuels.
“Investors are increasingly acknowledging that the November 4 federal budget follows through on Ottawa’s pro-business commitments,” they said.
“Further progress on Canada-U.S. trade negotiations — an outcome we consider likely in the months ahead — should provide another catalyst for domestic equities.”
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Workers are headed back to the office in Canada’s biggest cities, lifting the outlook for
national office leasing
.
Office leasing in downtown Toronto soared in the third quarter, absorbing about 1.5 million square feet of the top Class A space, said real estate company Morguard.
“This strong showing was attributed in large part to the return-to-office mandates of the nation’s largest banks and public sector,” said its report.
Calgary, London and Halifax also posted positive net absorption totals as nationally office leasing demand outpaced supply.
Canada’s office vacancy rate fell 30 basis points to 18.4 per cent, with the downtown Class A vacancy average falling to a “relatively healthy” 16.1 per cent.
Morguard expects leasing demand to increase into early next year as more workers return to the office for more days.
“In some cases, tenants will be forced to expand to accommodate their returning employees,” it said.
- Today’s Data: Canada Ivey purchasing managers index, United States initial jobless claims
- Earnings: Canadian Imperial Bank of Commerce, Bank of Montreal, Toronto Dominion Bank, BRP Inc., Dollar General Corp., Hormel Foods Corp., Hewlett Packard Enterprises Co., Kroger Co.
- Why Carney’s fiscal anchors are raising questions about Canada’s financial credibility
- RBC CEO warns of economic uncertainty as bank profit beats expectations
- Retired couple’s net worth could go from $1.75 million to over $5 million in 30 years, expert says
‘This is the new slavery’: Temporary farm workers underpaid, abused and injured
Broken bones, rashes from pesticide exposure, unpaid labour, substandard housing. That’s the cost often paid by the tens of thousands of migrants who come to Canada as temporary agricultural workers. Read the investigation
Names such as Bill Gates or Warren Buffett often come to mind when people consider philanthropy, but philanthropy is not just for the ultra-wealthy.
Everyday Canadians who want to make a difference can also give in many different ways.
The desire to give back is admirable, but determining where to begin — and how much to give — without impacting other financial priorities can be challenging.
Diana Orlic, senior investment adviser at Richardson Wealth, has some tips on how to integrate philanthropy into your financial plan.
Find out more
Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country’s most important sectors.
Sign up here.
McLister on mortgages
Want to learn more about mortgages? Mortgage strategist Robert McLister’s
Financial Post column
can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his
mortgage rate page
for Canada’s lowest national mortgage rates, updated daily.
Financial Post on YouTube
Visit the Financial Post’s
YouTube channel
for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.
Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.
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Posthaste: This once 'stranded asset' could be the next big driver of the TSX, strategists say
2025-12-04 13:02:15
