Cost and time remain major deterrents to would-be builders of nuclear plants. Two things, however, have changed dramatically to make the economics actually worthwhile, at least for a handful of players.

Unless an economic disaster takes place between now and the end of the year, China will deliver growth closer to 8 than 7 percent, and India should be able to register something close to 6 percent.

Before last year’s financial meltdown, China had already replaced the US as the world’s leading consumer of steel, copper and several other major commodities. At the beginning of the decade, for example, the US economy accounted for 25 percent of global demand for the red metal, while China consumed roughly 12 percent. By mid-2008, however, it was China consuming 27 percent, the US only around 12 percent.

Since the S&P 500, the S&P/TSX Composite Index and the S&P/TSX Income Trust Index bottomed on March 9, the two Canadian indexes have correlated more with the MSCI Asia All Country ex-Japan Index. In other words, Canada’s stocks have become more and more levered to the global economy, including areas in Asia where signs of economic recovery are easier to see.

China was never expected to be instrumental in helping economies avoid recession, contrary to an idea floated by people not well informed regarding the Chinese economy. What China could contemplate--and is in fact now doing--was to make sure its own economy would do well while contributing as much as possible to the avoidance of a total collapse of the financial system and the world economy.

The 170 billion barrels of recoverable reserves can help mitigate North American concerns about global security without causing extreme planetary degradation. The key is for US and Canadian policymakers to coordinate climate policy, combining efforts to regulate greenhouse gas emissions, for example, by at least linking their respective cap-and-trade proposals that are almost sure to be enacted within the next 12 months.

The main drivers of the most recent gains have been the increase in liquidity and the fact that many money managers are trying to boost their quarterly performance numbers. A lot of money is being poured into the emerging space--emerging market funds have received USD20 billion in the past two months--with Asia a prime destination.

Needless to say, opposition leaders are crowing about Mr. Flaherty’s lack of facility for numbers, and it’s rumored that at least one critic will ask for his resignation as early as this afternoon. At the same time, however, Liberal Party and New Democratic Party leaders are calling for increased aid to unemployed workers, what’s known in Canada as Employment Insurance (EI), and further steps to increase Canada’s stimulus package.

A month ago prominent bears were arguing that earnings season for the S&P 500 would cut the rally off the market’s March lows short. But just the opposite happened: Earnings results were largely well-received, and the advance continued.

The major averages have mounted an impressive recovery off the March lows, and the big question on most traders’ minds is if the move can continue. While I still expect we’ll see some sort of a correction of this run-up later on this year, there’s no sign of that correction just yet. Moreover, by year’s end, I expect the market to be trading higher.