The real estate and utilities sectors of the Toronto Stock Exchange have been enjoying a rebound with the onset of some interest rate relief, recently outperforming not only the TSX Composite Index itself but also the S&P 500.
“Rate-sensitive sectors of the equity market have been under assault since the tightening cycle began in early 2022,” BMO Capital Markets economist Robert Kavcic wrote in a note on Tuesday. “Since January of that year (the Bank of Canada began to raise rates in March), TSX real estate is down roughly 20 per cent, while utilities are off more than 10 per cent.”
Over the same period, the TSX has gone up around 10 per cent. The Bank of Canada has made two 25-basis-point cuts in that time, bringing its overnight rate down to 4.5 per cent.
“As…
