UBS Securities Canada Inc. is remaining positive on stocks despite the long list of concerns it sees.

In a new report it notes that the period from November to May has historically been kind to equities but, “it seems every year there are credible issues that lead investors to believe that this time might be different. This year the list includes the non-trivial issues of rising short and long-term interest rates, and earnings disappointments, not to mention commodity price and currency fluctuations.”

However, UBS says, “A closer look confirms the TSX’s resilience in the face of these adversities. Specifically, it rose between November and May, 10 of the last 12 times bond yields increased noticeably, eight of nine times when short rates rose, and five of six when both went up.” Also, it adds that, the TSX posted gains four of six times when earnings expectations fell, and posted better results when the dollar rose than when it fell.”

In this environment it is upgrading resources and downgrading financials. “In short, our economic forecast does not envision economic conditions severe enough to overcome the typical strength of equities,” it says. “Moreover, in light of that expectation and October’s share price slide, we are upgrading the resources: basic materials to overweight and energy to neutral. And with the balance of this cycle’s rate and bond yield rises just ahead, we are reducing the financials to underweight.”