RBC’s new Canadian stock strategy chief sets TSX target at 38,600

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Photo by Laura Proctor/Bloomberg via Getty ImagesRoyal Bank of Canada’s capital markets division named Sara Mahaffy as head of Canadian equity strategy, marking the first time in a decade it’s had a dedicated strategist covering the domestic stock market.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountA spokesperson for the bank confirmed the appointment of Mahaffy, a McGill University graduate who has been working under Lori Calvasina, RBC’s head of United States equity strategy.This advertisement has not loaded yet, but your article continues below.In her note launching coverage of the S&P/TSX Composite Index, Mahaffy set a 12-month target of 38,600 for the benchmark, implying roughly seven per cent upside. That’s above the average 37,150-point target for the S&P/TSX, according to data compiled by Bloomberg.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againPrime Minister Mark Carney courted some of the world’s largest investment firms and sovereign wealth funds at a recent summit in Toronto, where he unveiled a tax break to stimulate investment. Mahaffy sees domestic policy, cash deployment, investor sentiment and positioning as “green flags” for the TSX and “no clear red flags.”She recommends investors overweight the consumer staples and energy sectors.“Canada has historically outperformed the U.S. when inflation is picking up, which could give an edge to Canada if pressures prove to be stickier,” Mahaffy wrote in a note.The S&P/TSX has climbed 13.4 per cent this year, outperforming the roughly 12 per cent gain of the S&P 500 Index, thanks in part to a heavy weighting in energy and financials. Combined, those two sectors make up more than 50 per cent of the benchmark.—With assistance from Laura Dhillon Kane.We apologize, but this video has failed to load.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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