Q: In the last five days, the S&P is down 1.58% while the TSX is down 3.29% (as per G&M). I'm curious about why Canada's stock market, heavy with oil companies, would fare worse than the US, which is actually the one at war. Any ideas?
5i Research Answer:
Energy has done well, but materials and financials still make up a very large portion of the TSX, with combined weighting of 51% today. These sectors have been hit hard in the war sell-off and fears of inflation (higher oil prices). Energy is 17% and is up 20.5% YTD, which has helped the composite's 4% YTD gain. But the TSX will struggle if financials and materials do not perform. In the S&P 500, financials and materials are combined 14.5%.