Article content

If there was some sort of buyers’ strike on the Canadian dollar, you wouldn’t know it by the action of global investors, that much is for sure.

Instead of fleeing the Canadian stock market because of the Bank of Canada’s not-too-subtle shift in policy to weaken the loonie via verbal intervention, global investors have voted with their wallets by increasing their northern exposure, not reducing it.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or David Rosenberg: Why foreign investors are flocking to, not fleeing from, the Great White North Back to video

Net foreign buying of Canadian equities has topped $27-billion over the past six months, which has only happened two other times on record.

Global investors apparently see what I see: CAD weakness represents massive stimulus. From the peak, it is worth 300 basis points of equivalent rate cuts, but this form of stimulus shows up in a better future profit stream for Canadian companies that have a foothold in the U.S. marketplace

As I have said in my recent daily musings, the TSX had been trading at a significant discount to the S&P 500 and almost every sector on a three-year price/earnings-to-growth (PEG) basis was relatively more attractive. This is the result of three years of underperformance, but also because U.S. earnings revisions ratios are squarely to the downside while that is not the case in Canada.