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.
And just like that, 2021 is in the books. Whether this is your first Canada Market Wrap or you’ve been reading since we launched this Canadian version last February, thanks for joining us as we recap the prior month’s events. We love having you here!
Now, on to the fun stuff. How did markets do in 2021?
After 6 of the 7 TSX sectors went negative in November, the opposite occurred in December. Consumer Staples, REITs, Financials, and Utilities were the best performing sectors as wage and inflation growth prompted the Bank of Canada to accelerate the timing of potential rate hikes. The moves follow a similar trend in the US, where the Federal Reserve’s accelerated rate hike plan spurred investors to flee cyclical sectors in favor of defensive ones. As such, Info Tech was the TSX’s lone losing sector, falling 3.4%.
Hot Stocks of the Month: Healthcare, Essential Businesses Attract
Many defensive names made December’s Hot Stocks list, including Bausch Health Companies (BHC.TO), Dollarama (DOL.TO), Fortis (FTS.TO), Metro (MRU.TO), and George Weston (WN.TO). Despite the provinces of Ontario and Quebec reimposing many lockdown measures, the latter three companies have been classified as essential businesses, lessening the impacts to their operations. Though classified as a cyclical stock, convenience store chain Alimentation Couche-Tard (ATD.TO) surged 12.8% in December in part on news that its locations will be exempt from Quebec’s mandate that stores be closed on Sundays in January.
Nutrien (NTR.TO), Bank of Nova Scotia (BNS.TO), First Quantum Materials (FM.TO), and CCL Industries (CCL.B.TO) also made the cut for December’s ten best performers.
To close out a disappointing year in which it lost nearly two-thirds of its value, Canopy Growth (WEED.TO) fell back on the Laggards & Losers list for the sixth consecutive month. The specialty drugmaker plummeted another 20% in December, despite announcing a divestment of its Cannabinoid Compound subsidiary that will aim to reduce both operational complexities and short-term capital requirements. The cyclical names that investors fled the most were e-commerce giant Shopify (SHOP.TO), Caneco (CCO.TO), and Canadian National Railway (CNR.TO).
In what was an overall positive December that didn’t contain many significant Laggards and Losers, rounding out December’s list is Kinross Gold (K.TO), National Bank of Canada (NA.TO), TC Energy (TRP.TO), Thomson Reuters (TRI.TO), Barrick Gold (ABX.TO), and Open Text (OTEX.TO).