Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeInvestorEconomyCanadian stocks beating U.S. for a second year as banks surgeThe Canadian economy grew at a faster-than-expected clip in April with a 0.5 per cent expansion, alleviating recession fearsAuthor of the article:Last updated 1 hour ago You can save this article by registering for free here. Or sign-in if you have an account.The Canadian stock market’s climb this past year has been broader based than in the U.S., which has mostly been led by the AI craze. Photo by Stephanie Foden/BloombergCanada’s equity benchmark is positioned to outperform its United States counterpart for a second year in a row — which would be its first back-to-back win in 15 years.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorBut accomplishing that feat depends on whether the S&P/TSX Composite Index, which is up 9.9 per cent so far this year, can sustain its edge over the S&P 500 Index, which is up 9.6 per cent after Tuesday’s rally. The problem is both gauges’ advance have been driven by a single industry. In the U.S., it’s chipmakers and in Canada it’s banks.Roughly 60 per cent of the Toronto stock market’s gain this year stems from five bank stocks. Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Canadian Imperial Bank of Commerce and Bank of Nova Scotia have collectively added nearly 1,997 points, helping to propel the equity benchmark 3,145 points higher.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try again“This has been a spectacular first half of the year for the Canadian financials,” said Colin Cieszynski, chief market strategist and portfolio manager at SIA Wealth Management. He said a commodities boom has been “underpinning the Canadian economy and that’s been good for the banks.”Meanwhile, the five best-performing chipmaker stocks in the S&P 500, led by Micron Technology Inc., have contributed nearly 60 per cent of the index’s advance so far this year. When additional chip stocks are taken into consideration, such as Qualcomm Inc. or Nvidia Corp., the S&P 500’s gain is more concentrated than its Toronto equivalent.In Canada, the stock market is fuelled by the economic cycle instead of the technology cycle, according to Philip Petursson, chief investment strategist at IG Wealth Management.Data released Tuesday showed the Canadian economy grew at a faster-than-expected clip in April with a 0.5 per cent expansion, alleviating recession fears after a contraction in the first quarter. The Bank of Nova Scotia (Scotiabank) regional head office in Montreal, Quebec, Canada, on Friday, Jan. 9, 2025. Scotia aims for over 30% of Canadian banking volume from digital and virtual channels by 2028.“If the economic cycle continues to hold, and we think the risk of recession is very, very low in Canada or elsewhere around the world, it’s positive. But when the economy turns, that’s when the banks are going to start to face some headwinds,” Petursson said.To be sure, Petursson said the Canadian stock market’s climb this past year has been broader based than in the U.S., which has mostly been led by the AI craze. The concentration of gold miners in Canada have provided a lift, so have oil-producing stocks and tech darlings.Petursson expects to see more of those sectors boosting the market more so than banks through the rest of the year. Canadian bank stocks are more expensive than they’ve been at any point since the global financial crisis, on a price-to-book-value basis, according to data compiled by Bloomberg.“The market itself still has room to move forward, but the contributions will come from other areas,” he added. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.