December has been another good month for global markets with most indices trading positively.

Two of this year's laggards, Emerging Markets (EMs) and Canadian energy stocks, have particularly come to life in the last few weeks. Emerging markets are up about four per cent on the month, while Canadian energy stocks are up an impressive nine per cent. The two still lag behind other markets, but, as EMs are closing the gap, Canadian energy stocks have just crossed into positive territory for the year.

Their rally is not random. Both were hurt by the U.S.-China trade war, which has finally seen some meaningful progress. The countries have agreed on the first phase of a deal, which expects to see the U.S. rolling back some levies on Chinese products, and China increasing its purchases of U.S. agricultural products. It's important to remember that nothing is signed yet, but this positive sign has seen the markets respond in kind.

Aside from the U.S.-China trade deal, the Canadian energy sector has benefitted from some other good news. As I've mentioned in the past, the oil patch has been challenged by Canada's limited pipeline capacity. On December 1, Enbridge's Line 3 opened its Canadian section - expected to increase capacity by almost 200,000 barrels per day. When the U.S. side opens, hopefully in the next 12 months, capacity should double to a total of about 4000,000 barrels per day.

Lastly, one of the results of the recent Canadian election has been a federal government with a newfound desire to move forward with the Trans-Mountain pipeline. Along with higher oil prices, all of these developments have given investors renewed interest in Canadian energy stocks. For perspective, the sector's index is still about 50 per cent lower than it was a decade ago. But, with continued positive developments, there is reason to be excited about this sector again!