(Bloomberg) — The dramatic rally in U.S. stocks is showing signs of faltering while strategists say Canadian equities are ready to pull ahead.
The Canadian stocks benchmark touched a record high in July, climbing more than eight per cent this year, but it has struggled to keep pace with the high-flying S&P 500 Index’s 14 per cent gain. Mega-cap tech stocks drove the rally in the U.S., while Canada’s run has been more wide-ranging.
“This underperformance is NOT fundamentally justified,” Brian Belski, BMO Capital Markets’ chief investment strategist, told clients this week. “Canada is positioned for a significant catch-up trade, with Canadian small cap particularly well positioned.”
Lower interest rates, stronger earnings growth and broader stock leadership are…
