Hope for TSX Rests in Mining, Oil & Gas in Coming Months


Author Larry Berman

Posted: 2 Apr 2012 re-posted from etfcm

The fact that Canada added 80K+ jobs matters little to the TSX. The TSX works based on what is happening other places in the world and a weak US NFP report is far more important to the TSX than Canada’s “job gains.” If the much anticipated correction for the S&P 500 is about to unfold in the coming months, then the TSX does not stand much of a chance unless oil & gas and mining stocks start to lead. We think gold stocks stand a very good change of bouncing back in the coming months, but the banks, insurance companies, and the energy stocks, significantly less.

That said, the energy stocks are now relatively cheap compared to the TSX and very cheap compared to the banks, so probably a little rotation will be seen in the coming weeks and months into some of the higher energy dividend payers. If we are correct and the European banks are due for another summer of discontent, our banks will likely suffer some collateral damage.

 

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