When Trump Tweets on China Trade Talks, Buy Canadian Stocks

  • 12/03/2019
  • Source: Bloomberg
  • by: Divya Balji and Eddie van der Walt
When Trump Tweets on China Trade Talks, Buy Canadian Stocks
There’s no question about it -- global stock markets are roiled when Donald Trump tweets about the U.S.-China trade negotiations. Here’s one way to hedge against all that volatility: Buy Canadian stocks.

Just like that, clients get exposure to a developed $2 trillion market with a stable government and one more thing: a gold and silver haven. Miners have about an 11% weighting on the S&P/TSX Composite Index, while similar stocks on the U.S. benchmark have a mere 2.7% weight.

Canadian Haven
S&P/TSX Index can be a port in Twitter storm

That’s helpful on days like today, when Trump signals he could wait for another year before striking a trade agreement with China, sending investors fleeing risk assets and piling into havens. While the S&P 500 Index fell as much as 1.4% Tuesday, the TSX slipped by only half that amount.

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