“The TSX has effectively served as a hedge against institutional fragility, moving in tandem with global gold prices as investors seek protection from potential U.S. dollar debasement,” the report said.
One of the key advantages for Canadian stocks is their larger exposure to natural resources.
“In an environment where institutional risks and macro volatility remain elevated, this linkage to hard assets has become a key differentiator for Canadian equities, even though the strength has extended beyond commodities,” it said.
Desjardins also noted that gains in Canadian equity markets have been more diversified than U.S. indexes, which are largely being powered by a small group of tech stocks.
Looking ahead, the firm said it expects the TSX to continue to outperform the S&P 500 this year and next.
“While the opportunity cost of underweighting U.S. equities has historically been high, the…
