How Canadian stocks could outperform American stocks in 2014

Global Business

Could Canadian stocks outperform the American market this year? Some forecasters certainly think so.

The Toronto Stock Exchange has already enjoyed a blistering run of growth in 2014, making it one of the best performing markets of the year, second only to India’s Sensex.

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Why Canadian stocks will likely outperform in 2014?

Could Canadian stocks outperform the American market this year? Some forecasters certainly think so. The Toronto Stock Exchange has already enjoyed a blistering run of growth in 2014, making it one of the best performing markets of the year, second only to India's Sensex.

In downtown Toronto, the banking district is where the magic happens, where the big money is made. Oil, gas and mining might be in western Canada, in Alberta, Saskatchewan and British Columbia. But right here around Bay Street is where the market decides which companies are hot and which are not.

With its tickers, bright lights and hubbub of powerful people, it’s hard not to draw similarities to the center of New York’s financial district, Wall Street.

Canada can’t help but compare itself to the America. It’s the nature of neighbors. On the surface, these two countries are quite similar, but when it comes to their economies and their financial markets: there are some key differences.

Canada is more outward looking. With just 30 million people, companies here can’t just depend on domestic demand. They tend to sell more to the rest of the world, while American firms can rely more on their home market.

That outward looking economy has seen the Toronto Stock Exchange (TSX) surpass almost every other equities market this year. By June, the TSX had gained 11 percent this year, reaching pre-2008 levels, making it the second-best performing market, after India’s BSE Sensex.

A steady, more globally leveraged index might be more attractive to American investors, who’ve seen a disappointing first half to the year. The resource sector has played a huge role in the TSX’s recent run of fortunes and with fresh signs of stabilization in China, that growth may well continue.

For more, CCTV America spoke to Anthony Chan, Chief Economist at Chase.

Outlook for US interest rates

For more, CCTV America spoke to Anthony Chan, Chief Economist at Chase.