Canadian stocks’ record-setting rally Has room to run, BMO says

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Canadian stocks are primed to keep breaking records in months to come thanks to ready-to-deploy retail cash hoards and foreign investor inflows, according to BMO Capital Markets.

Stephanie Hughes, Bloomberg NewsDavid Burrows, president and chief investment strategist at Barometer Capital Management, joins BNN Bloomberg to share his outlook on the markets amid economic

“There remains a lot of room for Canadian stocks to run to continued new price highs,” Brian Belski, the bank’s chief investment strategist, wrote in a Tuesday note after the S&P/TSX Composite index hit an all-time high Monday. The benchmark touched 23,116.39 on the back of soaring gold prices. “Our work shows that the TSX tends to bottom and exhibit strong returns when cash positions decline from peak levels, with peaks in money market assets under management often coinciding with troughs in TSX performance,” Belski said.

Bank of America Corp. research also suggests more gains ahead. Its Canada cycle indicator — a measure based on data historically predicting Canadian stock outperformance against the S&P 500 Index — has turned positive for the first time since March 2023.

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