On the year (i.e., Q1 plus a day), the index is up a solid 7.0%, with double digit-gains in telecom, industrials, financials and energy—the latter have rallied more than 30%. Meantime, the TSX rose 1.8%, with technology and materials leading the pack. Year-to-date, Canadian equities still look strong, up 8.9% and outperforming the S&P 500. Double-digit advances in both of the heavyweight bank and energy sectors have certainly helped. Despite COVID-related restrictions re-emerging across various parts of the world, all major markets on our board were up on the week, including a 3.3% jump in Germany and a 2.5% gain in France—Europe actually led the pack in the first quarter.
On the data front, the economy continued to show momentum in March despite a third wave of COVID rising around parts of the world. The U.S. manufacturing ISM jumped to 64.7 in March, the highest level since the early-1980s, with new orders and employment both rising. Home price growth ramped up into double-territory, with the S&P Case-Shiller and FHFA indices posting gains of 11% y/y or better. And, consumer confidence (by the Conference Board’s measure) jumped more than 19 points in March. That leaves confidence still down from a year ago, but it’s the highest level since the pandemic began, and the spirits are likely to rise further as we move toward summer. Interestingly, plans to buy a home in the next six months hit the highest level in 17 years—as solid as it’s been so far, the wheels of the U.S. housing market expansion might just be starting to spin, and homebuilders have been rallying for a reason.
|Table 1 - Market Performance|
|Source: BMO Economics, Bloomberg|