The S&P/TSX posted a negative return for the month of January. The outcome took place in an environment where volatility peaked as GameStop (GME) rose rapidly at the end of the month. The S&P/TSX fell mostly at the end of the month, investors were potentially chilled by the speculation.
Last month, The S&P/TSX declined 0.3% while the S&P500 was down 1% and the MSCI ACWI ex USA increased by 0.2%. On an annual basis, the S&P/TSX was up 3.5%, the S&P500 soared 17.2% while the MSCI ex USA rose 14.4%.
The best TSX sector for January was Health Care up 34.8% followed by Utilities up by 2.6% and Information Technology up 1.5%. The worst sectors for the month were Consumer Staples down 4.2%, Materials down 3.5% and Consumer Discretionary down 2.6%.
The NQICAT was up 0.2% in January. On an annual basis, the NQICAT was up 0.7% while the S&P/TSX was up 3.5%.
The NQICAT’s best performers were Transforce (TFII), Richelieu Hardware (RCH) and Telus (T). TFII was up 30.1% due to a favorable reaction from the acquisition of UPS operations. RCH increased by 13.4% due to an excellent quarterly report. T was up 5.9% in the anticipation of the Telus international spin out (TIXT).
The worst performers in the NQICAT were Alimentation Couche-Tard (ATD.B) and Canadian National Railway (CNR). ATD.B dropped 10.1% based on the acquisition of Carrefour which was negatively perceived by investors. CNR fell 7.4% due to a weak outlook given by the management.
2 stocks were sold and bought in the strategy in January. We sold Great-West Lifeco (GWO) because the model recommended a shift from the financial sector to the material sector. It had one of the lowest scores of our financials. GWO has been replaced by CCL Industries (CCL.B) as the company had the highest SP score in the material sector.
We sold Fortis (FTS) because its score had decreased and other players with higher scores were available in the same sector. We replaced it with Hydro One (H) which had the highest score in the utilities sector.