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Advisors - May 3, 2021

Monthly Canada Market Wrap: April 2021

Welcome back to the Canadian Monthly Market Wrap from YCharts! Here, we break down the most important market trends for Canada-based advisors and their clients every month. As always, feel free to download and share any visuals with clients and colleagues, or on social media.

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Last month, coronavirus cases surged in Canada. Though the country is experiencing elevated numbers of cases per day, the curve has plateaued, and deaths per day remain low. Pandemic fatigue and several new variants have taken a larger — and growing — toll on the rest of the world.

Canada coronavirus cases per day, Canada coronavirus deaths per day, World coronavirus cases per day, World coronavirus cases per day from January 23rd, 2020 to April 30th, 2021

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Also this month, investors digested a grand buffet worth of earnings reports, as the majority of S&P 500 constituents updated shareholders on their Q1 2021 performances.

The second quarter of 2021 is in full swing, with these key developments occurring in April:

Off the YCharts! Crypto: Come-up + Correction = Correlation

Major Index Returns: April was, in fact, kind to stocks

Sector Movement: 5 out of 7 Winners in April

Hot Stocks of the Month: Shaw Communications, Retail Keep It Going

Laggards & Losers: Cannabis Burns Out; Grocery Stores, Railroads Skid

 Financial Market & Advisor News

Economic Data: Housing Goes Through the Roof

Off the YCharts! Crypto: Come-up + Correction = Correlation

That was good alliteration, wasn’t it?

April was another breakout month for several crypto assets, including Bitcoin, Ethereum, Litecoin, and Cardano. But prices corrected just as fast. As market leader Bitcoin goes, so goes the rest of crypto, based on the following price correlations:

2021 YTD Price Change of Bitcoin, Ethereum, Litecoin, and Cardano from January 1st, 2021 through April 30th, 2021

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Major Index Returns: April was, in fact, kind to stocks

TSX Composite 60, S&P 500 Major Index Returns for April 2021

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The US stock index S&P 500 was April’s market leader, logging a 5.4% gain. In Canada, the S&P/TSX 60 rose 2.2%. Internationally, Developed Markets were up 3.1%, while Emerging Markets added 2.5%. The Global Aggregate Bond Index broke a three-month losing streak and rose 1.3%.

Sector Movement: 5 out of 7 Winners in April

iShares S&P/TSX Capped ETF Sector Movement, April 2021

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Materials gave back some gains in the last two weeks of April but still led all TSX sectors to end the month up 5.3%. Canada REITs had a nice month as well, right behind Materials with a 4.6% gain. Two sectors finished slightly in the red: Consumer Staples and Utilities, down 0.5% and 0.8%, respectively.

Hot Stocks of the Month: Ten Best Performers

Top ten TSX stocks for April 2021

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Welcome back to the leaders list, Shaw Communications (SJR.B.TO)! After surging 47.5% in March on takeover news, shares were up another 8.9% after solid earnings, unveiling of high-speed internet product Shaw Gig WiFi, and a reaffirmation of the planned merger with Rogers Communications (RCI.B.TO). It was another healthy month through the eyes of consumers, enough to send Gildan Activewear (GIL.TO) and retail giant Canadian Tire Corp (CTC.A.TO) higher.

First Quantum Minerals (FM.TO) was the top TSX stock of the month, with Imperial Oil (IMO.TO), Franco-Nevada (FNV.TO), Power Corporation of Canada (POW.TO), Teck Resources (TECK.B.TO), Waste Connections (WCN.TO), and Kirkland Lake Gold (KL.TO) also making the cut for April’s ten best performers.

Laggards & Losers: Ten Worst Performers

Worst performing TSX stocks, April 2021

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Canopy Growth (WEED.TO) found itself back on the bottom ten list for the second straight month. This time, the company was April’s biggest TSX laggard as investors lost patience with its inability to tighten operations and turn a profit. April was a down month for Canadian grocery stores, as shares of Loblaw Companies (L.TO), George Weston (WN.TO), and Metro (MRU.TO) were all down. Commentary from BMO Capital Markets provided concern that underperforming Loblaw Companies may withdraw 2021 EPS guidance in the face of several headwinds, including government restrictions on shopper capacity. These headwinds could potentially affect Loblaw’s peers. Railroad stocks Canadian National Railway (CNR.TO) and Canadian Pacific Railway (CP.TO) took the #2 and #3 laggard spots on news that both companies were in a bidding war for acquisition target Kansas City Southern (KSU). 

Canadian Natural Resources (CNQ.TO), Open Text (OTEX.TO), Brookfield Infrastructure Partners (BIP.UN.TO), and Brookfield Property Partners (BPY.UN.TO) round out April’s ten worst performers.

Financial Market & Advisor News

S&P 500 Is Reporting Third Highest Net Profit Margin for Q1 Since 2008 (FactSet)

Your Complete Guide to Sector Rotation (YCharts)

ETFs see record inflows of $250 billion in first quarter (InvestmentNews)

Wall Street on Tax Plan: ‘It Will Incentivize Selling This Year’ (WealthManagement.com)

Examining SPAC Performance Pre- & Post-Merger (YCharts)

Canadian economy nears full recovery after March gain (BNN)

Economic Data: Housing Goes Through the Roof

Unemployment: Despite many provinces in lockdown, March’s Canadian unemployment rate clocked in at a pandemic era low of 7.5%. 817,800 Canadian males were jobless in February, while 698,900 females found themselves out of work. Canada Part-time Employment rose to 3.44M, adding 127,000 part-time workers from February.

Housing: Canada Housing Starts surged 38.4% in March to 21,689, the highest monthly gain since September 2007. The Canada New Housing Price Index jumped 1.1% in March.

Consumers: The Canada Consumer Price Index ticked up 0.07% in March, while the Canada Inflation Rate checked in at 2.2%, the highest level since February 2020.

Manufacturing: The Canada Ivey PMI roared to 72.9 in March, 12.9 points higher than February’s reading and a three-year high.


Have a great May! 📈

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