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Advisors - December 2, 2021

Monthly Canada Market Wrap: November 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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We’ve been hard at work to bring you a new tool in YCharts: Scatter Plot, which delivers even more ways to illustrate security and portfolio performance. Scatter Plot also enhances the ways advisors and asset managers communicate with their clients about portfolios and investment strategies using YCharts.

For example, you can compare a client or prospect’s current portfolio against your own model on an efficient frontier,

Portfolio efficient frontier scatter plot

…or visualize the risk and return for a group of securities. The example below illustrates that of the $1T+ market cap companies, Tesla (TSLA) is the most high-risk, high-reward play!

Scatter Plot of $1 trillion market cap companies

For more Scatter Plot features and use cases, check out this post or watch our 5-minute tutorial.

Late in November, the emergence of a new COVID-19 variant brought additional uncertainty to markets. The fifth variant of concern, Omicron, not only keeps with the Greek lettering tradition but early reports suggest that while highly contagious, symptoms are milder for those who happen to contract it. If true, investors might relieve themselves of some of that uncertainty.

Before getting too caught up in the holiday season, take a look at these key developments from the second-to-last month of 2021:

Major Index Returns: Omicron Erases November Gains

Sector Movement: 6 of 7 Negative, Materials Lone Positive

Hot Stocks of the Month: Gold Glows, Telecom Spat Quells

Laggards & Losers: (Five) Times the Charm for Canopy Growth

Economic Data: Unemployment Nearing Normal Levels


Major Index Returns: Omicron Erases November Gains

S&P/TSX Capped ETF Sector Movement, November 2021

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In what was looking to be a positive November for the TSX 60, the Omicron variant dashed those hopes away in the month’s final week. Eclipsing 3.4% in November, the Canadian benchmark index gave up all those gains and then some, to end the month down 1.1%. The same pattern played out globally but with more force, as the MSCI Emerging Markets and International Developed Markets tumbled 4.1% and 4.6%, respectively. Of equity indices, the US’s S&P 500 finished November the closest to even, declining 0.7%. Fixed income indices were the least impacted—the Global Aggregate Bond Index slipped just 0.3%.


Sector Movement: 6 of 7 Negative, Materials Lone Positive

S&P/TSX Capped ETF Sector Movement, November 2021

Download Visual | Modify in YCharts

Though technology was the best performing US sector this month, the near opposite was true in Canada. Info Tech fell 3.8% in November, with only the REIT sector faring worse, down 4.2%. Energy declined 3% as WTI crude oil dipped below $70 USD, a large retracement from its $85 high at the end of October. The only positive sector in November was Materials, which rose 1.1% as investors ran away from inflation by flocking into precious metals and mining companies.


Hot Stocks of the Month: Gold Glows, Telecom Spat Quells

Top performing TSX stocks, November 2021

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Gildan Activewear (GIL.TO) was the TSX 60’s best performing stock in November, jumping 13.8% on news of their earnings more than doubling YoY. Shares of Wheaton Precious Metals (WPM.TO) and Barrick Gold (ABX.TO) both rose 6.9% in November as investors piled into “safe haven” securities traditionally regarded as inflation-protected. Another noteworthy Hot Stock was Shaw Communications (SJR.B.TO), the target of a proposed takeover/merger by Rogers Communications, whose shares increased 3.8% as it was reported that the ongoing fallout between Rogers’ board and the Rogers family would not officially overshadow hearings related to the proposed merger. This news sent waves of stability through telecom competitor TELUS (T.TO), sending its shares up 2.9% as well.

Shopify (SHOP.TO), Loblaw Companies (L.TO), Thomson Reuters (TRI.TO), Cenovus Energy (CVE.TO), and Restaurant Brands International (QSR.TO) also made the cut for November’s ten best performers.


Laggards & Losers: (Five) Times the Charm for Canopy Growth

Worst performing S&P 500 stocks, November 2021

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Energy companies TC Energy (TRP.TO), Pembina Pipeline (PPL.TO), and Enbridge (ENB.TO) were all down more than 7% mainly due to the fall in crude oil prices. And, returning to the Laggards & Losers list for the fifth consecutive month is Canopy Growth (WEED.TO), whose shares tumbled another 12.3%. The decline comes on the news that both the company’s Executive VP & CEO and President & Chief Product Officer will be stepping down by year’s end, signaling a major management change that might be leaving many investors unsettled. 

Rounding out October’s Laggards & Losers list is CAE Inc (CAE.TO), Bausch Health Companies (BHC.TO), CCL Industries (CCL.B.TO), SNC-Lavalin Group (SNC.TO), First Quantum Minerals (FM.TO), and Canadian Pacific Railway (CP.TO).


Featured Market & Advisor News

Highest Number of S&P 500 Companies Citing “Inflation” on Q3 Earnings Calls in Over 10 Years (FactSet)

The Best Performing Mutual Funds in Each Category and How to Find Them (YCharts)

Bank of Canada says investor rush into housing risks correction (BNN)

5 Weak Links of the Broken Global Supply Chain (YCharts)

Canadian banks expected to unleash ‘dividend growth tsunami’ (Financial Post)

The New and Improved Inflation Hedge with Chris Dunn (YCharts)


Economic Data: Unemployment Nearing Normal Levels

Unemployment: The Canadian unemployment rate fell further in October to 6.7%, marking its lowest level since March 2020. The Canada Ivey Employment index, however, dipped another 1.7 points to 62, while Canada Part-time Employment recorded just 6,000 fewer part-time workers in October.

Housing: Though Canada Housing Starts rebounded from its first sub-20,000 reading since February 2020 in September, it quickly fell back below that level to 19,090 in October. However, housing prices grew solidly, with the Canada New Housing Price Index ticking up 0.9% in October.

Consumers: The Canada Consumer Price Index rose 0.5% in October, while the Canada Inflation Rate reached another record high since March 2003 of 4.65%.

Manufacturing: After surging above 70 in September, the Canada Ivey PMI fell 11.1 points in October to 59.30. Though October’s reading is a MoM decline of nearly 16%, a level above 50 still signals expansion in the manufacturing sector.

 

Have a great December! 📈

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