Monthly Market Wrap: March 2021
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You know the old saying, “one man’s trash is another man’s treasure”? That certainly applies to 2020’s ten worst performers from the S&P 500 index. Shares of Carnival Corp (CCL), Norwegian Cruise Line Holdings (NCLH), Occidental Petroleum Corp (OXY), United Airlines Holdings (UAL), Marathon Oil Corp (MRO), HollyFrontier Corp (HFC), Diamondback Energy Inc (FANG), NOV Inc (NOV), American Airlines Group Inc (AAL), and Schlumberger Ltd (SLB) are all much higher through Q1 2021. Four of those names are top ten performers across the entire S&P 500 for Q1.
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 (looking at you, Carnival Corp and United Airlines Holdings). 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: 11 out of 11 Winners in March
• Hot Stocks of the Month: Consumer Sentiment Charges Higher
• Laggards & Losers: Communication, Oil Slump
• Economic Data: Single Family Home Sales Plummet
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—value is up 10.8% after Q1 2021, while growth is about flat. Value is experiencing surging levels of trading activity, too.
Major Index Returns: Mixed Bag
The S&P 500 rose 4.4% and the NASDAQ finished just 0.5% higher as fears of rising treasury rates suppressed returns and the rotation from growth into value continued. Internationally, Developed Markets were up 2.4%, and Emerging Markets lost 1.5%. High yield corporate bonds were flat in March, while the Global Aggregate Bond Index fell another 1.9%, marking its third straight losing month.
Sector Movement: 11 out of 11 Winners in March
All 11 sectors posted positive gains in March. Taking the cake was Utilities with a 10.6% uptick, with Industrials right behind at 9% and Consumer Staples in a close third, rising 8.5%. Technology cooled off in March with just a 1.8% increase, as did Communication Services and Energy, which were up 2.6% and 3%, respectively, as rising interest rates likely swayed more money out of growth sectors and into value.
Hot Stocks of the Month: Ten Best Performers
The US Index of Consumer Sentiment jumped from 76.8 in February to 84.9 in March—it’s highest level since March 2020. This positive sentiment helped send shares of consumer cyclical companies Lennar Corp (LEN), AutoZone Inc (AZO), WestRock Co (WRK), and Gap Inc (GPS) higher. Bullish bets on an economic comeback, along with investors rotating into value, vaulted Nucor Corp (NUE), Kansas City Southern (KSU), and Boeing Co (BA) to higher levels.
Laggards & Losers: Ten Worst Performers
Multiple analyst downgrades and liquidation from Bill Hwang’s Archegos Capital Management pulled shares of ViacomCBS Inc (VIAC) down 30% in March. Investors also dumped fellow communication services stocks Discovery Inc (DISCA) and Twitter Inc (TWTR) on the news. Crude oil prices rose rapidly in early March only to give those gains back, sending shares of energy companies Baker Hughes Co (BKR), APA Corp (APA) and NOV Inc (NOV) lower. Penn National Gaming (PENN) was down 9.5% in March, despite being added to the S&P 500 and child company Barstool Sports launching a sportsbook in our home state of Illinois in time for March Madness.
Financial Market & Advisor News
Harness Volatility & Create Opportunity (YCharts)
Investor appetite for ETFs on the rise: Schwab (InvestmentNews)
Good Economic News Is Becoming a Double-Edged Sword for Markets (WealthManagement.com)
Production and Sales
Have a great April! 📈
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