US Is Still Winning For Now Against Canada

Igor Manukhov - Apr 26, 2024

The US is still winning despite some setbacks.

The month of April hasn't been kind to stocks in general, and US stock in particular. Canada has shown much more resilience this month. The question is: should we rebalance back to Canada? To answer this question, let's review a relative strength chart and compare the US stock market to the Canadian market. Despite recent relative weakness on the US side (indicated by the black line pullback), the overall trend remains intact and is pointing upward. It’s normal to experience short term pullbacks here and there (as we saw back in December of 2023), but the long-term trend direction should be the main driver.

Based on the relative strength chart below, I would still recommend overweighting US stocks against Canada until relative strength trend shifts in favour of Canada.