The Canadian equity market increased 3.3% during the first quarter as intervention by global central banks continued to stimulate equity markets. Gains were led by the health care, telecom services and consumer related sectors. The materials and utilities sectors were the worst performers as Canadian mining stocks are experiencing the longest slump in 20 years. Large-cap stocks continued to outperform their small-cap counterparts.

Global equity markets were also positive and outpaced the Canadian market with the MSCI World Index returning 10.1% in Canadian dollar terms. News of the European Central Bank’s commitment to unlimited bond buying spurred on the rally as did the Bank of Japan’s intent to effectively double the money supply by 2015. Emerging markets held their value but significantly underperformed developed markets. U.S. equities increased 12.9% due to better than expected income and consumption data. The weakening of the Canadian dollar versus the U.S. dollar added to U.S. market performance. 

Fixed income posted positive returns with the DEX Universe Bond Index increasing by 0.7%. The federal and provincial sectors underperformed the overall Index, with the majority of underperformance in the long-end of the maturity spectrum. The corporate sector outperformed the DEX Universe Bond Index. The Canadian yield curve steepened with the most significant movements in the short end of the curve as the 1, 2 and 3 year federal bond yields decreased by 6, 15 and 18 basis points respectively. The Bank of Canada maintained its overnight rate at 1.0%, while the U.S. Federal Reserve left the Fed Funds Rate target unchanged at 0-0.25%.

The Canadian equity market increased 1.7% during the fourth quarter as intervention by global central banks helped stimulate equity markets worldwide. Gains were led by the consumer staples, information technology and industrials sectors. The materials and energy sectors were the worst performing sectors and the only ones that posted negative absolute returns. Large-cap stocks outperformed their small-cap counterparts.

Global equity markets outpaced the Canadian market with the MSCI World Index returning 3.9% in CAD. News of the European Central Bank’s commitment to unlimited bond buying spurred the rally. Emerging markets had another positive quarter returning 6.9% and outperformed developed markets. U.S. equities increased 0.8% as fears of going over the “fiscal cliff” were alleviated. The weakening of the Canadian dollar added to foreign market performance.

Fixed income posted positive returns with the DEX Universe Bond Index increasing by 0.3%. The federal and provincial sectors underperformed the overall Index, with the majority of underperformance in the long-end of the maturity spectrum. The corporate and municipal sectors outperformed the DEX Universe Bond Index. The Canadian yield curve shifted upwards marginally with the most significant movements in the short and mid ends of the curve as the 3 and 8 year federal bond yields increased by 13 and 15 basis points respectively. The Bank of Canada maintained its overnight rate at 1.0%, while the U.S. Federal Reserve left the Fed Funds Rate target unchanged at 0-0.25%.

The Canadian equity market as measured by the S&P/TSX Composite Index increased 7.0% during the third quarter after a rough second quarter. Gains were led by the materials, energy, and health care sectors with 13.1%, 8.5% and 8.1% returns respectively. All ten sectors posted positive returns for the quarter.

Global equity markets were also positive (with the exception of Japan) with the MSCI World Index returning 3.1% in CAD. Emerging markets rebounded from last quarter with a 4.1% return. Markets were propped up on news of several global central banks’ plans for significant easing. ECB President Mario Draghi, stated that they would do whatever it takes to save the euro hinting at unlimited sovereign bond buying. U.S. equities increased 2.7%, following the U.S. Federal Reserve’s announcement that they will purchase mortgage-backed securities every month until the labour market improves substantially.

Fixed income posted positive returns with the DEX Universe Bond Index increasing by 1.2%. Provincial issues as well as municipal and corporate bonds outperformed the overall Index while federal bonds lagged. Long-term bonds outpaced shorter-term maturities. The short-end of the Canadian yield curve flattened as the one-year and five-year yields increased. The spread between Canadian and U.S. long bonds increased during the quarter as the U.S. yield curve continues to react to operation twist. The Bank of Canada maintained its overnight rate at 1.0%, while the U.S. Federal Reserve left the Fed Funds Rate target unchanged at 0-0.25% and extended its interest rate outlook to mid-2015.

The Canadian equity market as measured by the S&P/TSX Composite Index declined 5.7% during the second quarter after a stellar start to the year. Only three sectors were positive with gains led by the health care, consumer staples and telecom sectors. Information technology was the worst performing sector along with the materials and energy sectors.

Global equity markets were also down with the MSCI World Index returning -3.0% in Canadian Dollars ($C). This was driven by the negative sentiment surrounding European sovereign debt as the troubled nations continue to struggle with heavy austerity measures aimed at reducing debt levels and securing financing for future obligations. U.S. equities declined 0.8%. This performance outpaced other equity markets including Japan, which fell 5.4% ($C). Emerging markets trailed developed markets, returning -6.9% ($C).

Fixed income posted positive returns with the DEX Universe Bond Index increasing by 2.2%. Provincial and municipal bonds outperformed the overall Index while Corporate and Federal bonds lagged. Long-term bonds outpaced shorter-term maturities as long-term and mid-term bond yields declined. The Canadian yield curve shifted downward and flattened while the U.S. yield curve also flattened due to falling yields. The Bank of Canada maintained its overnight rate at 1.0%, while the U.S. Federal Reserve left the Fed Funds Rate target unchanged at 0 – 0.25%.