Canadian investors prefer tech, U.S. stocks, survey shows

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Canadian retail investors appear all in on the hype of artificial intelligence and technology stocks, especially the Magnificent Seven and other tech plays in the United States, according to a recent report from Moomoo Financial Canada Inc.

The Canadian tech sector is up 29.9 per cent in the past year and 9.6 per cent in the past three months, according to Simply Wall Street Pty Ltd. In the past year, Constellation Software Inc. (up 54.6 per cent year over year) and Descartes Systems Group Inc. (up 32.4 per cent) have emerged as some of the top-performing Canadian tech stocks, the market researcher said.

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But the Moomoo survey said 71 per cent of Canadian retail investors prefer U.S. stocks.

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“At the time the survey closed on August 21, the S&P/TSX composite index was up over 10 per cent since the beginning of the year and the S&P 500 index over 17 per cent, led by the technology sector,” Justin Zacks, vice-president of strategy at Moomoo, said in a news release last week.

“Investors continue to favour this sector, likely reflecting confidence in the promise of artificial intelligence. Given that many of the largest technology companies are headquartered and listed in the U.S., it comes as no surprise that most Canadian investors continue to buy more U.S. stocks than Canadian stocks.”

Beyond the tech sector, the defensive utilities and materials sectors were the most popular investing categories, which Moomoo suggests could be a sign that Canadians remain cautious when it comes to the economy.

                                        Moomoo Financial

This is consistent with the survey, which said 51 per cent of Canadian respondents expect a recession in the next six months.

Economists largely believe Canada will narrowly avoid a recession as the economy slows to cool inflation.

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In July, RBC Economics said Canada’s population growth has helped the country avoid a recession, but the country’s output is falling and unemployment is climbing, which makes it feel like a recession has already arrived.

Though the Moomoo survey’s respondents were divided on Canada’s economic future, they remain confident in achieving their financial goals, with 29 per cent feeling very confident while 63 per cent are somewhat confident.

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Bloomberg News

With the Bank of Canada largely expected to cut interest rates this week, many economists have warned cuts could hurt the Canadian dollar, but so far the loonie has bucked predictions. As Bloomberg reports, traders were the most bullish on the loonie in 15 years last week as investors worry about weakness in U.S. currency. Despite the optimism, the loonie remains the most shorted currency among the major economies, with more than US$8 billion bet against it. Read more here.

• The Bank of Canada is widely expected to cut its benchmark interest rate to 4.25 per cent at its policy meeting today
• Scotiabank hosts a conference featuring remarks by the CEOs of Canadian banks and insurers
• Today’s Data: Canada and United States trade figures, United States factory and durable goods orders
• Earnings: Alimentation Couche-Tard Inc, Descartes Systems Group, Dollar Tree Inc, Hewlett Packard Enterprise Co.

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With the new school season upon us, it might be time to look at the status of your education savings plans.

Registered Education Savings Plans (RESPs) are great way to get your child’s education on the right track, but as certified financial planner Jason Heath explains, there are several things parents and grandparents need to consider when opening and contributing to these accounts. Read more here.  Read more here. 

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you wondering how to make ends meet? Drop us a line with your contact info and the gist of your problem and we’ll try to find some experts to help you out, while writing a Family Finance story about it (we’ll keep your name out of it, of course). If you have a simpler question, the crack team at FP Answers, led by Julie Cazzin, can give it a shot.

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McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

Today’s Posthaste was written by Ben Cousins, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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