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Although oil prices were largely attributed to the recent recovery in Canadian equities, the less-watched industrial sector also suffered a tear.
Since the beginning of the S & P / TSX Composite Index February, industrial stocks as a group are up 17 percent and hit a record high on Wednesday, driven by the performance of the railways and supported by a wider range of transport companies, construction, industrial and industrial equipment. This equates to Canadian market energy sector gains
As a sector closely tied to general economic conditions, industries gained strength in the United States and Canada, while resisting uncertainties surrounding renegotiations of the North. The US free trade agreement and tensions between the United States and its major trading partners.
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"One would think that with all the commercial concerns, it would be one of those sectors a bit curbed." Said Ryan Bushell, president and manager of portfolio of Newhaven Asset Management Inc. of Toronto "This shows how strong the economy is."
Canadian National Railway Co. shares hit record high after quarterly results on Wednesday exceeded expectations The year-over-year profit growth of 27 percent prompted the company to increase its 2018 forecast, without mentioning the adverse effects of US President's tariffs. Donald Trump on cross-border deliveries
"CN's new chief executive, Jean-Jacques Ruest, said at a conference call with badysts on Tuesday.
Canadian Pacific Railway Ltd., meanwhile, n & # 39; not far from a record after posting a growth rate in their earnings last week.
Both companies appear to benefit from economically favorable winds and a surge in demand for crude oil shipment by rail despite a bottleneck. "The railways are in great shape right now," Bushell said,
and the industrial sector in general. The two companies together account for more than half of the industrial sector's market capitalization of the S & P / TSX Composite Index.
But there are other industrial titles that contribute significantly to the main Canadian index
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Waste Connections Inc. also surpbaded badysts' estimates Tuesday, adding to a long series of gains, and relying on a stock market run that experienced little d & # 39; interruption. Over the last five years, the company's waste management share price has risen an average of 26 percent each year, a record that the stock should reach this year again.
Toromont Industries Ltd. Canadian industrial earnings Tuesday. After the Caterpillar construction equipment dealer beat the Street's forecast, Toromont shares rose 15% to a record high on Wednesday.
But the industrial sector, although relatively small in Canada, is difficult to generalize.
Jennifer Radman, who manages the Caldwell Canadian Value Momentum Fund, maintains a sector weight of more than 40% of the fund, based not on a sectoral appeal, but on a stock ascending selection process.
Radman highlighted the range of industrial stocks held by the fund, such as ATS Automation Tooling Systems Inc., which provides factory automation services; Cargojet Inc., a nighttime air cargo company benefiting from the growth of e-commerce; WSP Global Inc., an engineering firm; and Ag Growth International Inc., which supplies agricultural equipment equipment.
If the shares of the industrial sector have anything in common, it is that their economic situation tends to be related to the fluctuations of the economy
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And making economic predictions is a particularly difficult game these days, given the business risks badociated with an unpredictable US government. "It's basically a binary result: zero or one," said CIBC deputy chief economist Benjamin Tal. a recent interview with The Globe and Mail. "Everything would be fine, we would find some sort of solution to NAFTA, there would be no trade war with China – and it is very optimistic for markets and economic growth. One is the other possibility, where we have a large-scale trade war, the NAFTA is destroyed and we have a much more negative impact on the stock markets and economic growth. "
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