u/Best_Key3780

Saw a poll saying Americans trust Canada more than their own government in trade talks, which is kind of interesting if you look at it from a market angle. The two economies are already tightly linked through trade, supply chains, and capital flows, and a lot of Canadian pension money is sitting in US equities anyway, so in practice Canadians are already pretty tied to US market performance. Makes me wonder how much this kind of “trust” actually matters- does it lead to anything tangible like more stable policy, smoother capital movement, or even tighter valuation gaps between US and Canadian equities, or is it just noise that never really shows up in prices? From a portfolio perspective the structure hasn’t really changed, the US still dominates in growth and tech while Canada is more financials, energy, and materials, different drivers but not independent. Curious how people here think about it, does sentiment like this ever become investable or is it just something that sounds meaningful but doesn’t actually change positioning?

The Canadian economy is highly dependent on the commodity cycle. Over the past decade, the global resources industry has been in a prolonged period of low capital expenditure. Instead of expansion, it has focused more on "capacity reduction + cost control".

However, during the commodity cycle, the bear market itself often reshapes the supply curve - the contraction in capital expenditure will eventually translate into a shortage of supply in the future, which forms the basis of the next upswing cycle.

From the perspective of market performance, the S&P/TSX Composite Index has shown relatively strong overall performance over the past two years. This partly reflects the synergy between the recovery of resource prices and the improvement of cash flow. However, this is more indicative of the middle stage of the cycle rather than its conclusion.

The key question is:

Is the current rise the beginning of a new long-term commodity cycle, or a delayed rebound from an old cycle?