Canadian investment strategists expect the country’s main stock index to keep up its momentum next year, even with possible tariffs from Donald Trump’s incoming administration hanging over the economy.
Portfolio Manager Andrew Pyle on what TSX sectors investors should keep an eye on and how likely will we see another bull market in 2025.
Rising corporate earnings and lower interest rates will help drive the equity benchmark toward a record 28,000 points in 2025, according to some market watchers, which would mean another year of double-digit returns in 2025. The TSX got off to a slow start this year before gaining speed after the Bank of Canada began its rate-cutting cycle in June. The central bank has delivered five successive rate cuts, bringing the overnight rate down to 3.25%. That’s a full 125 basis points below the upper bound of the Federal Reserve’s policy rate.
BMO Capital Markets strategist Brian Belski has a TSX target of 28,500 by the end of next year, and expects valuations to expand thanks to rate cuts and a rebound in flows into Canadian stocks. The Canadian dollar has been weak — slower growth, lower rates and Trump are the key factors. But the TSX benefits “quite strongly” from that, Petursson said, because it has so many companies with a sizable percentage of US-dollar earnings, which are worth more when converted back into loonies. For exporters, a lower Canadian dollar would be a partial offset to tariffs.
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