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A calamitous earnings season for Canadian energy stocks is combining with stronger-than-expected economic data from China on Friday to provide Canadian investors with a window of opportunity.

Reflecting the effects of slowing global growth on commodity prices, the current earnings season has been terrible for domestic energy stocks. In quarter-over-quarter terms, oil and gas stocks have seen revenue fall by 7 per cent and earnings decline by 33 per cent. As a result, the S&P/TSX oil producer index has fallen 4 per cent since Oct. 1.

Data released in China overnight, however, suggest that the outlook for the sector may be improving. China's industrial production growth, a major driver of commodity demand, came in much higher than economists' expectations at 9.6 per cent, year over year. Retail sales and fixed-asset investment reports also generated positive surprises.

Depressed stock prices in the Canadian energy sector reflect quarterly, backward-looking results while the Chinese data suggest the growth prospects are brightening. This suggests there is an opportunity to buy stocks in the sector that do not yet reflect expected rises in demand.

The window may not stay open long and investors taking advantage may want to keep a quick trigger finger over the "sell" button. The abysmal stream of European economic data continues and the upsurge in Chinese activity may prove temporary. But, in a market where investment returns have become far more scarce, any chance to benefit from temporarily mispriced assets should be taken seriously.

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