Monthly Canada Market Wrap: March 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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After a particularly dark winter, coronavirus cases are back on the rise in Canada. The same trend is happening across the world—but Canadians can at least feel good that COVID-19 deaths per day continue to fall.
Also this month, we celebrated the one-year anniversary of the March 2020 market bottom. Little did we know how much the world, our daily habits, and our portfolios, would be changed. Some stocks lost over half their value in a matter of days. But, since the bottom through the end of March 2021 the Dow is up 77.4%, the S&P 500 77.6%, and the NASDAQ a whopping 93.1%. Goes to show how important staying invested is, no matter how dire things look.
As the sun sets on the first quarter of 2021, we’ll focus on these key developments in March:
• Off the YCharts! Changing of the Guard
• Major Index Returns: Mixed Bag
• Sector Movement: 6 out of 7 Winners in March
• Hot Stocks of the Month: Consumer Confidence Charges Higher
• Laggards & Losers: Copper, Tech Lose Steam
• Economic Data: Manufacturing Goes Back to Work
Off the YCharts! Changing of the Guard
The big story of 2020 (and the last decade) was growth’s outperformance over value. However, in March the tables turned—Canadian value is up 11.9% after Q1 2021, while Canadian growth is slightly down. Value also saw increased levels of trading activity, too.
Major Index Returns: Mixed Bag
The S&P/TSX 60 rose 4.4%, as did the S&P 500, its American counterpart. Internationally, Developed Markets were up 2.4%, while Emerging Markets lost 1.5%. The Global Aggregate Bond Index fell another 1.9%, marking its third straight losing month.
Sector Movement: 6 out of 7 Winners in March
Consumer Staples led the way across TSX sectors, posting a near 10% monthly gain. Financials followed with another strong monthly increase at 6.8%, and both Energy and Utilities were close behind at 6.3% and 6.2%, respectively. Info Tech was the only sector that finished March in the red, down 2.2% as rising interest rates likely swayed more money out of growth stocks and into value names.
Hot Stocks of the Month: Ten Best Performers
Shaw Communications Inc (SJR.B.TO) surged 47.5% in March on news it agreed to be bought by competitor Rogers Communications (RCI.B.TO). Consumer confidence reached the highest level in 16 months, prompting stocks of retailers George Weston Ltd (WN.TO), Dollarama Inc (DOL.TO), and Loblaw Companies Ltd (L.TO) to move higher. The lifts in the Energy and Utilities sectors are in part thanks to big months from Pembina Pipeline Corp (PPL.TO), Canadian Natural Resources Ltd (CNQ.TO), Emera Inc (EMA.TO), and Fortis Inc (FTS.TO).
Laggards & Losers: Ten Worst Performers
Shares of Shopify Inc (SHOP.TO) dropped almost 16% in March as the company signaled on its last earnings call that slower growth may be ahead, in addition to being a victim of the rotation out of tech stocks. Though copper is typically popular during periods of economic growth, First Quantum Materials Ltd (FM.TO) fell 12.7%, and fellow copper miner Teck Resources Ltd (TECK.B.TO) lost 9.2%.
Canopy Growth Corp (WEED.TO), TELUS Corp (T.TO), Nurien Ltd (NTR.TO), Thomson Reuters Corp (TRI.TO), Gildan Activewear Inc (GIL.TO), Bausch Health Companies Inc (HBC.TO), and Cenovus Energy Inc (CVE.TO) were each down less than 4% in what was a rather quiet March for the TSX.
Financial Market & Advisor News
Harness Volatility & Create Opportunity (YCharts)
Investor appetite for ETFs on the rise: Schwab (InvestmentNews)
A month after launch, Purpose Bitcoin ETF tops $1 billion in AUM (Wealth Professional)
Unemployment: February’s Canadian unemployment rate clocked in at 8.2%, the lowest level in a year. 875,000 Canadian males were jobless in February, while 791,000 females found themselves out of work. However, Canada Part-time Employment rebounded to 3.31M, adding 170,000 part-time workers from January.
Manufacturing: The Canada Ivey PMI vaulted to 60.0 in February, 11.6 points higher than January’s reading.
Have a great April! 📈
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