Global Outlook

Sector Performance

Contributed by eResearch

By Bob Weir

We are updating, below, the table that we provided in our Clarion of May 25, 2010. It shows the 2010 highs that occurred in April in the various Canadian sector indexes as well as the major market indexes. Since then, after the 15% overall market pull-back, the major indexes and most of the sub-indexes are struggling to regain the highs. As expected, defensive sectors have performed the best: Consumer Discretionary has led the pack, with Utilities, Telecommunications, and Consumer Staples out-performing.

Looking ahead, while we remain cautious about the intermediate term, we have been calling for a bounce upwards over the short-term. If the market can get going for a while, we expect the laggards, i.e., Information Technology, Financials, and Energy will show better performance than the defensive sectors. However, since there seems to be a marked interest in yield, the defensive sectors will also likely perform relatively well.

With there still being considerable obstacles to global economic recovery, we continue to anticipate further market retrenchment during 2010 before growth resumes in 2011.