Canadian stocks are likely to outperform American stocks in 2014, says a report from CIBC World Markets Inc. Avery Shenfeld, chief economist at CIBC and co-author of the report, says “after being trounced by New York ‒ and Europe and Japan for that matter ‒ in 2013, Canadian stocks entered the year with less stretched valuations, and greater potential for earnings gains that will pay off in outperformance in the year ahead.” ‘Outlook 2014: Give Low Rates a Chance’ says Canadian stocks also have more leverage to a rapidly heating global economy than do their U.S. counterparts. CIBC economists call for 2014 to be the first year since 2010 in which global growth surprises on the upside. They are calling for growth to run at a four per cent pace, about a half-point above current consensus or International Monetary Fund expectations. Historically, years in which global growth ran at four per cent or better were big winners for the cyclically weighted Toronto Stock Exchange, producing median returns well above the S&P 500.
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