Financial Analysts Adapt Strategies Amid Market Shift

The world of finance is constantly evolving, and analysts are having to adapt their strategies to keep up. The Globe and Mail asked several experts about their favorite indicators for making sense of a changing market landscape.

Ethan Currie, a strategist at National Bank, points out that monitoring the futures curve in crude oil prices can provide insight into whether markets expect supply disruptions or geopolitical premiums to persist. He notes that if you use these curves as a guiding input, it's clear that markets don't expect crude to return to pre-war levels anytime soon, an important consideration for inflation dynamics.

Marc Sheard, equities portfolio manager at Vancity Investment Management, emphasizes the importance of maintaining a longer-term perspective and avoiding biases from near-term market signals. He notes that market breadth has become more concentrated in recent years, with only about 30% of S&P 500 companies outperforming the index over each of the past three years, but this year, that share has risen to over 50%

Other experts are also looking at different indicators. Kim Shannon, founder and co-chief investment officer at Sionna Investment Managers, notes that when inflation is above 2.5%, value investments outperform growth by 11% annualized. She also points out that in the five prior periods when inflation was north of 4%, Canada averaged an 8% outperformance over the US.