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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.

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 March 31st, 2020

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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.

Price and daily volume changes, iShares Canadian Value and iShares Canadian Growth for Q1 2021

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Major Index Returns: Mixed Bag

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

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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

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

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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

Top ten TSX stocks for March 2021

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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).

Franco-Nevada Corp (FNV.TO) and CGI Inc (GIB.A.TO) round out March’s ten best performers.


Laggards & Losers: Ten Worst Performers

Worst performing TSX stocks, March 2021

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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

Impact of Rising Rates on the Mortgage Market (FactSet)

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)

What to Look for in Value vs. Growth Stocks (YCharts)

Canada’s recovery gains steam, with growth tracking above 5% (BNN)


Economic Data 

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.

Housing: Canada Housing Starts fell for the third straight month, down 9.0% in February. The Canada New Housing Price Index surged 1.9% in January.

Consumers: The Canada Consumer Price Index ticked up 0.14% in February, while the Canada Inflation Rate checked in at 1.09%, the highest level since February 2020.

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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