Sid Mokhtari, chief market technician at CIBC Capital Markets.Supplied
June was a choppy month for the S&P/TSX Composite Index with the index advancing on 11 trading days and declining on 11 others.
The index climbed above the 35,000 mark for the first time, closing at a record high on June 16. However, momentum faded in the final days of June with the index closing out the month at 34,857, posting a modest price return of 0.25 per cent.
CIBC’s chief market technician Sid Mokhtari helps investors identify stocks with strong technical and quantitative characteristics that may lead to portfolio outperformance.
Mr. Mokhtari publishes a monthly report with his top 10 stock ideas. He screens and selects stocks from the largest 100 members by market capitalization within the S&P/TSX Composite Index. His technically driven stock recommendations have consistently outperformed the broader index across a wide range of market conditions.
Last month, however, was an outlier. His portfolio of top picks declined 5.48 per cent, significantly underperforming the S&P/TSX Composite Index, which advanced 0.25 per cent.
Unfortunately, this underperformance erased the portfolio’s strong relative gains in 2026. In the first half of 2026, his basket of top picks has advanced 9 per cent and is now slightly underperforming the S&P/TSX Composite Index that has a 9.92 per cent price return.
It is important to note that his disciplined process has delivered strong long-term returns. His stock selections have outperformed the S&P/TSX Composite Index for the past four calendar years. In 2025, his portfolio of stock selections rallied 51.3 per cent, compared to a 28.3 per cent price return for the S&P/TSX Composite Index.
His stock selections also outperformed the TSX Index in 2024, 2023 and 2022 by 5.8 percentage points, 6.3 percentage points and 2.7 percentage points, respectively.
For July, his diversified basket of stock selections includes nine new stocks and one carryover from the previous month.
Last month, the portfolio did not have any exposure to financials. This month, financials represent the portfolio’s largest sector exposure with the addition of Intact Financial Corp. (IFC-T), Manulife Financial Corp. (MFC-T) and National Bank of Canada (NA-T).
The portfolio holds two utilities stocks: Capital Power Corp. (CPX-T), carried over from the prior month, as well as ATCO Ltd. (ACO-X-T).
In industrials, Canadian National Railway Co. (CNR-T) and Toromont Industries Ltd. (TIH-T) made the list.
In real estate, two REITs were added, CT Real Estate Investment Trust (CRT-UN-T) and Granite Real Estate Investment Trust (GRT-UN-T).
In consumer discretionary, Magna International Inc. (MG-T) replaced Linamar Corp. (LNR-T).
According to Mr. Mokhtari, over the past 30 years, the S&P/TSX Composite Index has rallied by an average of 0.9 per cent in July with solid gains stemming from financials, real estate as well as industrials.
In his best ideas report published on June 30, Mr. Mokhtari suggested that June may have been an inflection point for equity markets, “June may have marked a decisive inflection point in quant style and factor leadership. Value and quality-oriented quant ETFs moved sharply higher in our model rankings, taking over what had been dominated by growth exposures for much of the past twelve months… From a factor lens, the relative strength of growth is beginning to decelerate, reflecting both tighter liquidity conditions and a steady repricing of the policy path forward – investor sentiment is tilting toward a more hawkish U.S. Fed. This shift is reinforced by the persistent bear flattening in the U.S. Treasury curve observed since the start of the year – a pattern that has historically coincided with late-cycle rotations and tighter liquidity conditions (2011, 2014, 2018, and 2021–2022) … Overlaying this backdrop also aligns with the two overlapping cycles that historically brings about double-digit corrections for equity indices. Calendar year 2026 sits at the intersection of year two of the U.S. presidential cycle and what we would classify as year four of the current bull market that began in 2022. Historically, this overlap has been associated with elevated equity volatility, particularly into Q3 [third quarter] and ahead of U.S. midterm elections. In this context, the recent rotation away from growth and toward value and quality should not be viewed as transient noise but rather as an early expression of a more volatile market environment.”
Based on his analysis, he believes the following investment strategy may prove to be successful going forward, “We see limited risk-reward in chasing late-cycle momentum concentrated in growth, and instead prefer exposure to cyclical value and high-quality stocks characterized by strong ROE [return on equity], durable margins, and improving relative-strength momentum profiles.”