The Canadian stock market realized one of its worst performance in February. This negative outcome unfolded as growing concerns on the economic impact of the COVID-19 was being factored in investor expectations. Given the elevated level of equity markets, the COVID-19 was the perfect trigger for a market correction.
The S&P/TSX Total Return Index declined by 5.9% in February and the S&P 500 also declined by 8.2% while the MSCI ACWI ex. USA lost 7.9%. At February end, the 12-months S&P/TSX Total Return Index gain was 4.9% behind the S&P500 gain of 8.2% and higher than the MSCI ACWI ex. USA who was flat.
The best TSX sector for the month of February was Information Technology down 2.7%, followed by Utilities down 3.1%, and Real Estate down 3.8%. On the contrary, the worst performing sectors were Health Care (-16.7%), Material (-7.6%) and Energy (-7.5%).
The best performers in February were Brookfield Asset Management (-0.9%) Constellation Software (-1.7%) and TFI International (-2.3%). Brookfield Asset Management trades as a bond equivalent and performs relatively well when long term interest rate decrease and the market considers IT stocks like Constellation Software isolated from the COVID-19 economic impact. At the opposite, the weakest contributors were CCL Industries, which was down 20.6% on very disappointing results as organic growth missed by a wide margin, Kirkland Lake Gold was down 20.2% due to poor production gold grade in Fosterville and Equitable group was down 15.4% because of low guidance despite better than expected results.