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Adrien Veczan/The Canadian Press
Earnings season begins with stock markets red hot, valuations rich, and investor enthusiasm off the charts. Expectations are high. But probably not high enough.
Throughout the pandemic, analysts and forecasters have struggled to keep pace with the explosive rebound in economic activity and corporate profits in both Canada and the United States.
As a result, the corporate sector has consistently posted results well ahead of expectations, providing markets with a steady drumbeat of positive news, thereby reinforcing investors’ upbeat sentiment.
Power Producers Extend Canada Loss Streak as Bond Yields Pop
Bloomberg 2/25/2021 Michael Bellusci
(Bloomberg) Some of 2020’s top performing stocks in Canada have lost some luster as bond yields grind higher and recent power woes in Texas add to the drag.
Canada’s utility stocks have fallen for 13 straight sessions, their longest losing streak on record. Rising yields on bonds reduce the attractiveness of utilities as a safe-haven for dividend-oriented investors.
The “dramatic” spike in bond yields has been the primary culprit for the sector’s weakness, said Chris Kerlow, a Toronto-based portfolio manager at Richardson Wealth Ltd. The firm remains positive on Algonquin Power & Utilities Corp. because of its power and renewable exposure.
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