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Commodities from oil to gold have ended their epic swoon – and, in the process, turned Canadian stocks into some of the world’s hottest offerings. The Bloomberg Commodity Index, which tracks 22 raw materials, finished Monday more than 20 per cent above its low on Jan. 20, meeting the most common definition of a bull market.
The new exuberance in raw materials prices has shaken the Canadian stock market out of last year’s slump and transformed it one of the best-performing exchanges in the world so far in 2016.
Monday’s trading extended the winning streak in the S&P/TSX composite index, which entered a bull market of its own late last week. Since the market bottom in January, the S&P/TSX composite has been led by a 43-per-cent gain in the materials sector, and an 18-per-cent advance in energy stocks.
Remarkably, there are only three non-resource names among the top 40 performers on the index this year.
Two of those – TransAlta Corp. and Westshore Terminals Investment Corp. – have plenty of exposure to commodity prices despite residing in different sectors. That leaves Bombardier Inc. as the one true outlier in the rankings of resource-based winners.
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