Canadian small-caps have been seeing a nice run over the past several months, and a lot of this has been supported by strong momentum in precious metals and energy names. XCS is not yet at all-time highs, but it is only 10% away.
In the economic cycle, given the PMI readings from both the US and Canada, we believe we are in the 'expansion' phase, however, this will differ from what stage the financial markets are in, as they are forward-looking. The financial markets saw this period of expansion and pending economic stimulus months ago and have begun pricing it in. This period of economic expansion mixed with declining/flat rates should help bolster equities for some time, but one of the most important upcoming metrics will be where inflation finally settles, and how that impacts the economy.