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.
Equities made a solid rebound in March after spending the first two months of the year in the trenches. The S&P/TSX 60 index advanced 3.8% in March, while its US counterpart, the S&P 500, made a similar stride of 3.7%. Small caps were the standout among all Canadian equity styles, ending the month 5.3% higher.
Investors continued to favour precious metal and commodity stocks in light of the ongoing Russian invasion of Ukraine, which sent the Materials and Energy sectors soaring 10.4% and 7.4% in March, respectively. Consumer staples finished the month 9.2% higher as well, signaling a further shift toward defensive names. Info Tech and Financials were the only two sectors that ended March in the red.
Over in fixed income, yields roared higher across the board. The Canada 2-Year Benchmark Bondrate jumped by 86 basis points in March, from 1.45% to 2.31%, the most of any Canadian fixed income instrument. Meanwhile, the longer-term Canada 10-Year yield grew by 56 bps from 1.84% to 2.40%. In global bond news, the German Bund went in and out of negative territory to end the month with a yield of 0.62%, its highest level since 2018.
Finally, highlights in economic data include the Canadian unemployment rate plummeting by a full percentage point to 5.5%, a level not seen in nearly three years. Canadian inflation increased for the eighth consecutive month to 5.69%, but manufacturing was strong, with the Canada Ivey PMI surging 10 full points to end February, the indicator’s latest printing, above 60.
The Canada Consumer Price Index rose 0.62% in February, while the Canada Inflation Rate continued climbing to 5.69%. The Canada Inflation Rate currently stands at the highest level since August 1991. February’s 5.69% print also represents the eighth straight monthly increase for the inflation rate.
Despite all the events taking place in March that would typically be favorable for gold, the price per ounce in CAD was $2,444.90 per ounce at March’s end, staying about flat month over month. Nevertheless, the iShares S&P/TSX Global Gold ETF (XGD.TO) surged 11.2% in March, largely stemming from increased production among gold-producing companies within the ETF.
Oil prices went through heightened volatility in March but ended the month higher than they were in February. As of March 28th, the WTI Daily Spot Price was $107.55 USD per barrel, and Brent sat at $114.50 USD/barrel.
Major cryptocurrencies made solid headway in March. The price of Bitcoin was $47,063 USD as of March 31st, still 30.4% off its all-time high but about 25% higher from where it was on February 28th. Ethereum ended March at $3,384 USD, representing a similar almost 25% gain in the month. Cardano had its first winning month in several, recovering from a max drawdown of 73.4% to close March at $1.19, representing a 32.8% monthly increase.