Canadian stocks may be set to outperform the U.S. market this year, according to a key indicator created by Bank of America. The Canada Cycle Indicator incorporates a range of data, including inflation and interest rates, to try and predict the future performance of the TSX, Canada’s main stock index, against the S&P 500, its American counterpart. The big deal? At the end of August, it inched into positive territory for the first time in 18 months. Whenever the indicator has been positive, the TSX outperformed the S&P 500 about 60% of the time. Last quarter, the TSX beat out the S&P 500, recording 12% growth compared to the S&P 500’s 10%. It could be a comeback for Canadian stocks, as last year the TSX saw only a 5.8% gain while the S&P 500 soared 22.5%. If you’re considering investing in Canadian stocks after the latest round of rate cuts, now may be a good time: the TSX has been trading at its largest discount ever compared to the S&P 500.