Michele Robitaille, managing director and equity-income specialist at Guardian Capital L.P., says concerns surrounding two key sectors of the Canadian equity market are putting a brake on its performance. "Looking more closely at the issues, these concerns could well be overblown," she says.
The Canadian equity market has "stagnated" in the first five months of 2017, says Robitaille. The S&P/TSX Composite Index had a total return of 1.50% and a price return of 0.41% over this period. Dividend stocks, as measured by the S&P/TSX Composite High Dividend Index, were modestly weaker. This index produced a total return of 1.35% for the first five months of 2017 and a price return of minus 0.42%.
Overhanging the Canadian equity market, says Robitaille, is the weakness in the price of oil, which is affecting the heavily weighted energy sector. Also, the overheating in the Canadian housing market and the possibility of a correction is affecting investor sentiment regarding the Canadian banks, which make up another large portion of the S&P/TSX Composite Index.
