By the end of September, the S&P 500 index
SPX, -1.40%
had trounced the Canadian equivalent by 11.5% on an annual basis over the prior two years. The gap is only widening. From July to the end of last month, the S&P has scorched the iShares S&P TSX 60 Index ETF
XIU, -1.43%
by 28.8% annualized.
Why so lopsided?
This answer from George Athanassakos, finance professor at the University of Western Ontario, would surely appeal to the MAGA set.
‘They favour taxing corporations and the rich, and adding regulatory impediments and red tape to corporate activity. They are big supporters of income redistribution as opposed to making the pie bigger for everyone. They want to regulate the economy and nudge corporations to submit to the Liberal government’s social views and economic philosophy.’
Athanassakos, writing in the Financial Post, chalks up the underperformance to the “Trudeau effect,” in reference to the Canadian prime minister.
“Trudeau and his ministers have made it clear they want corporations to become benevolent organizations that put workers before shareholders,” he continued. “When a democratically elected majority government ends up following policies driven by activists, it’s neglecting its larger mission and mandate and that will eventually hurt the economy. This is what the stock market is anticipating.”
While he acknowledged the Canadian economy is humming along as “one of the best in the G-7,” he says, considering the market reflects future economic performance, it won’t last, and the blame lies squarely with the government.
“Their policies take away economic entrepreneurship and wealth creation and replace it with handouts to every significant lobby and activist group,” he wrote. “Canadians are getting the sense that they are governed by a bunch of idealistic and dogmatic college students convinced they will save the world.”
Meanwhile, there’s not much reason to crow in terms of the stock market’s performance in Wednesday’s dreary session, with the Dow Jones Industrial Average
DJIA, -1.30%
off by more than 300 points.
Source : MTV
