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Stocks in 2016 have been “A Tale of Two Markets”, going from the ‘worst of times to the best of times’ as the recovery from the worst start to a year ever has turned into solid gains, at least in Canada, as we end the month of April. Since Feb. 11, when the U.S. stock market pulled out of its early 2016 tailspin, the S&P500 Index has rebounded by 14%, leaving it up about 1% for the first four months of the year. It has been dubbed a ‘reflation trade’ because it has been led by commodities, notably crude oil, which has run up more than 70% from its lows in the mid-$20-a-barrel range to the mid-$40s, and has been accompanied by a 3% drop in the U.S. Dollar Index, which has lit a fire under other commodities such as gold. All of this helped Canada’s S&P/TSX Composite Index generate another 3.7% gain in April, lead by an 8.4% gain for the Energy sectors and a whopping 20% monthly gain for the Basic Materials group, home to the formerly downtrodden mining stocks. The Canadian market’s 7.2% year-to-date gain is the best among the major industrialized stock markets, although it is well behind the gain of over 20% for Brazil, another resource-oriented economy coming out of a long period of stock market underperformance. (more…)