The last time Canadian stocks started the year with such a dramatic gain, Michael Jackson’s “Rock With You” was the number one song, the Rubik’s Cube had just hit store shelves, and Bank of Canada’s key lending rate was almost 13%.
The S&P/TSX Composite Index has gained 6.9% since the close of trading on Dec. 31, the largest increase over the first 18 days of the year since 1980, when the benchmark was up 8.5%, data compiled by Bloomberg show. The index is up 11 straight days.
Behind this year’s rally are firms that were unimaginable in 1980, when Cheech and Chong’s second film had just hit theaters—pot producers. The top three gainers year-to-date are Canopy Growth Corp., up 58%, Cronos Group Inc., up 37%, and Aurora Cannabis, up 26%.
The gain puts Canadian stocks in eighth place among developed-world markets, providing some relief to investors who lost almost 12% last year. Austria is leading with an 8.8% gain while the S&P 500 has advanced by 6.5%.
The next strongest start to the year was in 1987 when the Canada’s key equity gauge gained 6.7%, just nine months before Black Monday sent markets tumbling.