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Advisors - March 3, 2021

Monthly Canada Market Wrap: February 2021

Welcome to the first ever 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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Looking for the US Market Wrap? Click here.

As a third coronavirus relief bill floats its way through the United States Congress, investors are considering the long-term impacts that additional stimulus will have on the world’s most popular currency, and Canada’s largest trading partner. From the more Northern perspective, a weakened US dollar means more affordable imported goods and more purchasing power when border hopping to the lower 48.

Canadian Dollar to USD, GBP, EUR Exchange Rates as of February 28th, 2021

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Also this month, Health Canada approved AstraZeneca’s COVID-19 vaccine after a months-long review, making it the country’s third authorized provider. Johnson & Johnson (JNJ) also applied for emergency use of their single-shot formula, which was just approved for use in the States by the FDA. Though less effective than Pfizer, Moderna, and now AstraZeneca’s double-dose vaccines, a one-and-done solution would speed up vaccination rates rapidly. After all, unless you really want that second smiley face bandage and lollipop, wouldn’t it be nice to get just a single jab?

With 2021 in full swing, we’ll focus on these key developments in February:

Off the YCharts! Returning to Normalcy

Major Index Returns: Coming Back Down to Earth

Sector Movement: 4 out of 7 Winners in February

Hot Stocks of the Month: Energy Finds Its Source

Laggards & Losers: Gold, Gold, and Gold

Economic Data

Off the YCharts! Returning to Normalcy

Speaking of jabs, we’ve added vaccinations to our library of Coronavirus (COVID-19) data available in YCharts. Use this data—ranging from cases and deaths per country to the number of vaccines administered in Canada per day—to further your investment decisions and communicate insights to clients.

In the world of investing, down-and-to-the-right charts typically cause frowns. But if you’re charting world coronavirus cases per day, deaths per day, and death rate, then it’s nothing but smiles! As both vaccine supply and the number of manufacturers grow, watch for an increase in people fully vaccinated, accelerating the return to normal life.

World Coronavirus Cases, Deaths, Death Rate, and Vaccinations as of February 28th 2021

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Major Index Returns – Coming Back Down to Earth

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

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After taking a breather in January, the S&P/TSX 60 was back off to the races in February, posting a gain of 4.8%. Despite giving back some gains in the latter half of the month, the TSX posted the highest increase of the five indices. The S&P 500 also had a second-half selloff but still managed to rise 2.8% in February. International Developed Markets and Emerging Markets added 2.3% and 0.8%, respectively, while the Global Aggregate Bond Index fell 1.7%.

Sector Movement: 4 out of 7 Winners in February

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

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Energy led all sectors for the second straight month with a whopping 22% gain thanks to rising oil prices. Financials followed with a 6.6% increase in February as RBC (RY.TO) reported strong earnings at the end of the month. Sectors that failed to pick up gains in February were Consumer Staples, Materials, and Utilities.

Hot Stocks of the Month: Ten Best Performers

Top ten TSX stocks for February 2021

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OPEC cuts, vaccine progress, and sooner-than-expected growth in oil demand were a match made in heaven for Inter Pipeline Ltd (IPL.TO), whose 39.6% gain earned the title for top stock of February. Fellow energy companies Cameco Corp (CCO.TO), Cenovus Energy Inc (CVE.TO), and Canadian Natural Resources Ltd (CNQ.TO) all rose at least 20% on the news as well. Shares of copper miner First Quantum Minerals Ltd (FM.TO) jumped 28.8% in February as investors flocked into assets that tend to outperform in better economic times, such as copper.

Also making the cut for February’s top ten TSX performers are Bausch Health Companies Inc (BHC.TO), Gildan Activewear Inc (GIL.TO), SNC-Lavalin Group Inc (SNC.TO), Magna International Inc (MG.TO), and—Canada’s most valuable company—Shopify Inc (SHOP.TO).

Laggards & Losers: Ten Worst Performers

Worst performing TSX stocks, February 2021

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Well, gold sure lost its shine this month. As interest rates rose and investors opted for those reflationary assets, six of the top seven TSX laggards were gold companies, each falling by 10% or more. Utilities also slumped on the back of that news, with Algonquin Power & Utilities Corp (AQN.TO) and Emera Inc (EMA.TO) falling 7.5% and 6.2%, respectively. Reddit traders targeted Canopy Growth Corp (WEED.TO) in February, bringing shares of the cannabis maker down 18.2% after a 63.4% run in January. Rounding out February’s ten worst TSX performers is CGI Inc (GIB.A.TO).

Financial Market & Advisor News

Bond ETFs hammered by growing inflation bets (InvestmentNews)

How to Visually Explain the Rise in Treasury Yields (YCharts)

Warren Buffett’s 9 Nuggets of Wisdom for Investors: 2021 (ThinkAdvisor)

Bitcoin Hits $1 Trillion Value as Crypto Jump Tops other Assets (WealthManagement.com)

Free Download: Breaking Down ESG & SRI Funds (YCharts)

Robinhood, Finra Working on Settlement Over Outages, Options Trading (FA-IQ)

Economic Data 

Unemployment: January’s Canadian unemployment rate clocked in at 9.4%, rising for the third straight month. 974,000 Canadian males found themselves out of work in January, while 920,000 females were jobless.

Housing: Canada Housing Starts were down 5.7% in January, falling for the second straight month. Nonetheless, the Canada New Housing Price Index rose 0.74% in January.

Consumers: The Canada Consumer Price Index ticked up 0.36% in January, while the Canada Inflation Rate checked in at 1.02%, the highest level since February 2020.


Have a great March! 📈

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