The Canadian market is grappling with a profits recession of its own – a fact that can go overlooked amid a torrent of U.S. financial results.
And like in the United States, there is some hope that the first-quarter earnings season will mark a turning point for Canadian profitability.
"It's still going to be choppy. And it's still going to be uneven," said Ryan Lewenza, a strategist with Raymond James. "But the worst is behind us. And if this trend in commodities continues, we should see a rebound in Canadian earnings."
The strains of the commodity crash will still be very much apparent when Canada's earnings season hits full stride in May. But so may the first signs of profits bouncing off the bottom.
Canadian stocks have been among the best performing in the developed world this year, with the S&P/TSX composite index having risen by more than 6 per cent year to date.
In fact, by one measure, the composite entered a new bull market this week, having risen by more than 20 per cent from intraday trough to peak.
The Canadian benchmark bottomed out in mid-January and began a winning streak that approached the 14,000 mark on Thursday before retreating somewhat.
The drop and rally in equities has closely tracked a similar pattern in crude oil. After hitting its lowest price in 13 years in January of $26 (U.S.) a barrel, U.S. crude oil rallied to trade as high as $44 a barrel on Thursday.
The collapse of crude oil and other commodities have marred the Canadian earnings backdrop, with aggregate fourth-quarter earnings for companies in the composite falling by 20 per cent year-over-year, according to Bloomberg data.
Canada's first-quarter earnings will extend the pain, as aggregate profits are expected to decline by about 10 per cent from the prior year's first quarter, according to a National Bank Financial report.
But the global commodity complex has rebounded definitively from winter lows, leading to optimism that higher resource prices will soon filter through to the bottom lines of energy and mining companies.
And while the Big Six lenders have had to increase provisions to cover bad loans to the oil patch, the fallout is manageable so far, and bank profits have mostly proved resilient.
"I think the banks are going to deliver and I think we're going to have a less awful quarter from resources," Mr. Lewenza said. Still, any material rebound in Canadian earnings is likely to be concentrated in the second half of the year.