This edition of Market Factors begins with a bull case for technology and the S&P 500 with details that may surprise some investors. We move on to the time-honoured oil price up, sustained investments down trend and the diversion covers an in-depth study of popular music.
Equities
Tech to retake the lead
Evercore ISI strategist Julian Emanuel thinks the market is ahead of itself but there are prominent sectors trading at decade-low valuations relative to the benchmark. The strategist’s base case is for crude prices to drift lower to below US$90 per barrel, to a range that will not present a hurdle for a longer stock rally.
Mr. Emanuel emphasized the S&P 500’s rapid recovery, comparing it to 1982 when the index quickly surged 69 per cent from a June 30 low. In terms of relative strength index (RSI), the U.S. equity market has raced from oversold to overbought more quicky than the tariff-related market trough in 2025.
Conditions were much different in 1982 – bond yields had peaked after an inflationary 1970s, most importantly, when now the future for inflation and bond yields is unclear. Price-to-earnings (PE) ratios had fallen to eight times, an incomprehensible level for modern investors dealing with 25 times earnings now.
There are, however, similarities with ’82. Oil prices had peaked then and heading lower. The same potential now would support a longer equity rally – Mr. Emanuel believes that a WTI price below US$77 would support an S&P 500 above 9,000 (currently near 7,155).
Evercore is confident that technology stocks will once again assume market leadership for the foreseeable future. The forward PE of the Nasdaq 100 relative to the S&P 500 is at lows last seen in 2016 despite much stronger average profit growth. To further support his bull case Mr. Emanuel, somewhat tongue in cheek, titled two charts “Under Powell, It’s Never ‘Too Late’ to Buy Stocks “ in his most recent report. (This observation points towards my belief that traditional market cycles might be extinct but that’s a story for another day).
The strategist did not provide stock ideas but has previously touted stocks he categorizes as “Perfection amid chaos”, companies reporting both revenue and profits above consensus for the past eight quarters. These include Nvidia Corp. (NVDA-Q), Apple Inc. (AAPL-Q), Microsoft Corp. (MSFT-Q), Amphenol Corp. (APH-N), Qualcomm Inc. (QCOM-Q), Palo Alto Networks (PANW-Q), Datadog (DDOG-Q), and EPAM Systems Inc. (EPAM-N).
Active domestic investors have been focused on energy stocks in recent weeks and this has worked out extremely well. Those looking to take profits might have difficulty finding new homes for the proceeds domestically – Scotiabank strategist Hugo Ste-Marie published a report Monday highlighting recent underperformance of TSX defensive sectors like telecom and consumer staples. It might be a good time to scale into AI-related tech with a portion of their portfolios.
Trends
Oil up, ESG stocks down
Death, taxes and the underperformance of sustainable investing themes when crude is rallying are three certainties in life. RBC Capital Markets analyst Sara Mahaffy detailed the latter of these trends in Fresh Eyes On Thematic Flows & Performance In 2026 released Friday.
The analyst noted consistent outflows from sustainable investing funds through much of 2025 due to underperformance, policy headwinds and anti-ESG sentiment emanating from the White House. However, RBC estimates that US$2.7-trillion remains in sustainable equity and fixed income funds globally.
Bright spots amid the broad underperformance trend include hydrogen, sustainable infrastructure, transition materials and clean energy stocks. Clean energy companies are benefiting from data centre construction as the AI hyperscalers - Amazon, Meta Platforms, Alphabet and Microsoft - pledge to avoid stressing existing power grids with new AI infrastructure. This involves bringing your own power solutions that often feature sustainable electricity generation.
Ms. Mahaffy tracks what she calls ESG Darlings - stocks widely held by sustainable investing funds. Large cap members of this group that are outperforming the S&P 500 include Trane Technologies PLC (TT-N, beating the index by over 15 percentage points year to date), Linde PLC (LIN-Q, +11 percentage points), Applied Materials (AMAT-Q, +50 percentage points), Nextera Energy (NEE-N, +10 percentage points), Gilead Sciences (GILD-Q, +8.0 percentage points), Deere & Co. (DE-N, +22 percentage points) and specialized real estate company Equinix Inc. (EQIX-Q, +38 percentage points).
Smaller cap stocks held by sustainable funds that are outperforming include Nextpower Inc. (NXT-Q, +15 percentage points), Clean Harbors (CLH-N, +15 percentage points), Emcor Group Inc. (EME-N, +19 percentage points), Darling Ingredients (DAR-N, +48 percentage points), HA Sustainable Infrastructure Capital Inc. (HASI-N,+16 percentage points) and F5 Inc. (FFIV-Q, +9 percentage points).
RBC is looking to the U.S. midterm elections, specifically Democrat gains in the House of Representatives, to change sentiment for the sector.
Puerto Rican singer Ricky Martin (R) performs before the start of the 2026 ICC Men's T20 Cricket World Cup final match between India and New Zealand at the Narendra Modi Stadium in Ahmedabad on March 8, 2026.PUNIT PARANJPE/AFP/Getty Images
Diversions
Songwriting affected by streaming payments
Canadian music journalist Alan Cross recently touted a podcast with Chris Dalla Riva, author of Uncharted Territory: What Numbers Tell Us about the Biggest Hit Songs and Ourselves.
The author listened to all number one hit songs since 1958 in search of patterns. Some aren’t overly surprising - most of us are aware that songs in the 1960s were more political, for instance - but other trends were more enlightening. Musical artists are paid for a music stream after 30 seconds so songs are now shorter and get to the hook more quickly.
Mr. Dalla Riva also argues that many music trends are ‘downstream” from technical innovations, notably in the 1980s (the greatest era for music ever, as we’re all aware). Ricky Martin’s Livin’ la Vida Loca was the first song completely mixed digitally is another factoid.
The author provided two reading suggestions beyond his own book - Walter Hickey’s You are What You Watch; How Movies and TV Affect Everything and Nabokov’s Favourite Word Is Mauve: The literary quirks and oddities of our most-loved authors by New York Times columnist Ben Blatt.
The essentials
Looking for our updates on market movers, analyst actions, stock technicals, insider trades and other daily, weekly and monthly insight? Click here to visit our Inside the Market page.
Globe Investor highlights
Tom Bradley has some thoughts on how to approach the growing number of free trades offered by online brokers
Desjardins’ chief economist on why the TSX is set to outperform U.S. stocks in this ‘year of chaos’
Gary Christie crunches some numbers to find Canadian stocks that offer defence as the TSX flashes a warning
Analysts are still bullish on gold prices, according to the latest Reuters poll
Quick hits
Citi analyst Alastair Syme highlighted a potential flashpoint for European aviation. The region’s largest carrier, Lufthansa, is cutting some routes because jet fuel costs have exceeded $1,500 per tonne. This is bad news for announced plans to increase the use of sustainable aviation fuel (SAF), which currently costs roughly US$2,500 per tonne. Regulations now stipulate carriers use SAF for 2 per cent of fuel. This number climbs to 6 per cent in 2030, 20 per cent in 2035 and 70 per cent by 2050.
Goldman Sachs chief U.S. equity strategist Ben Snider wrote “Recent IPO performance has been mixed, with strong first-day rallies but below-average returns in subsequent months” in his Weekly Kickstart report. He wrote that as if he didn’t know that it’s the pattern for the majority of the time.
National Bank strategists Ethan Currie and Stefane Marion recognized that WTI crude is near record prices in Canadian dollars. The recent highs just below C$160 per barrel was hit only once before during Russia’s invasion of Ukraine. The oil company profits will be enormous as a result.
Read this week’s earnings and economic calendar here