TSX Review - Hudson MacSween Personal Investment Management

Portfolio Advisory Group
Monthly Performance Review ScotiaMcLeod Portfolio Advisory Group May 6, 2015  S&P/TSX Composite  S&P 500 May 6, 2015
S&P/TSX Index Performance Review – April 2015
ScotiaMcLeod Portfolio Advisory Group – Monthly S&P/TSX Index Performance Review April 2015 – Energy Companies
Power Returns as Oil Recovers
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The S&P/TSX Composite index gained 2.16% through April on a price‐only basis. With 248 stocks in the index at month end, 155 rose, 92 declined, and one was left unchanged. The S&P/TSX small‐ and mid‐cap indices outperformed the broader index in April, while the large‐cap index underperformed. In CAD terms, the S&P/TSX index's 2.2% price‐only gain beat the S&P 500 index's 3.8% price‐only decline. The S&P/TSX Index started the month by climbing for 7 consecutive trading sessions before plateauing for much of the balance of the month, closely tracking the S&P/TSX Financials and Energy indices. Energy was the best performing sector through April, getting the biggest boost from companies such as Suncor Energy Inc. (SU), Encana Corp. (ECA), Enbridge Inc. (ENB), and Canadian Oil Sands Ltd. (COS) as oil (WTI) jumped 19% in C$ terms during the month. 8.0%
2.0%
2015 Index Returns (price only)
S&P/TSX Composite S&P/TSX 60 S&P/TSX Completion S&P/TSX SmallCap April
YTD
+2.16% +4.05% +1.99% +3.71% +2.69% +5.08% +4.55% +3.55% Top 10 Point Contributors
Top 10 Point Detractors
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Royal Bank of Canada (+44.4) 
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Valeant Pharmaceuticals International Inc. (+29.0) Canadian National Railway Co. (‐44.4) 
Magna International Inc. (‐22.5) 
Bank of Nova Scotia (+28.8) 
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Suncor Energy Inc. (+26.2) Alimentation Couche‐Tard Inc. (‐14.5) 
Toronto‐Dominion Bank (+21.9) 
Brookfield Asset Management Inc. (‐12.9) 
Encana Corp. (+19.7) 
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Barrick Gold Corp. (+17.0) Potash Corp. of Saskatchewan Inc. (‐9.4) 
Canadian Imperial Bank of Commerce. (+16.0) 
Fairfax Financial Holdings Ltd. (‐8.8) 
Bank of Montreal (+15.0) 
Agrium Inc. (‐8.0) 
First Quantum Minerals Ltd. (+14.9) 
CGI Group Inc. (‐6.5) 
Catamaran Corp. (‐6.2) 
Open Text Corp. (‐5.7) Energy
7.0%
April 2015 Monthly S&P/TSX Composite Index Performance by Sector (Price only)
6.0%
4.0%
Materials
3.3% Healthcare
S&P/TSX 2.9% Financials Index
2.3%
2.2%
Cons.
Staples
‐3.0%
Utilities
0.6%
0.0%
Cons.
Discr. Industrials
‐3.4%
‐3.4%
Telecom Info Tech
‐0.2%
‐0.2%
‐2.0%
‐4.0%
Source: Bloomberg
Portfolio Advisory Group S&P/TSX Index Performance Review – April 2015
Sector
Monthly
price-only
return
Monthly
total
return
Notable Movement
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Financials 34.7% of S&P/TSX Composite +2.3% +2.9% 
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Energy 22.2% of S&P/TSX Composite +7.0% +7.1% 
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Materials 10.9% of S&P/TSX Composite +3.3% +3.5% 
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Industrials 8.1% of S&P/TSX Composite ‐3.4% ‐3.4% 
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Consumer Discretionary 6.2% of S&P/TSX Composite Healthcare 5.3% of S&P/TSX Composite Telecommunications Services ‐3.4% ‐3.3% +2.9% +2.9% ‐0.2% 
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3.5% of S&P/TSX Composite Information Technology 2.4% of S&P/TSX Composite Utilities 2.2% of S&P/TSX Composite ‐3.0% ‐0.2% ‐0.2% +0.6% +0.7% The Materials sector had a volatile month in April, with 31 of 51 constituents rising, while 19 declined, leaving one unchanged. Barrick Gold Corp. (ABX, +13.2%) was the sector’s biggest point contributor; First Quantum Minerals Ltd. (FM, +20.4%) followed close behind as the second biggest point contributor, supported by a 5% jump (USD terms) in the price of copper during April. Potash Corp. of Saskatchewan Inc. (POT, ‐3.5%) was the sector’s biggest point lagger, as the shares continued a slide that began in Feb/2015. POT’s fertilizer peer Agrium Inc. (AGU, ‐5.3%) was the sector’s second biggest point lagger. 12 of the Industrials sector’s 23 constituents gained through April, but were overshadowed by the other 11 constituents’ declines. Overall, the sector declined relatively consistently through April. Canadian National Railway Co. (CNR, ‐8.2%) was by far the largest influence on the sector in April, detracting 85.5 points throughout the month, as the company halved its F15 crude‐by‐rail/frac sand growth forecast along with its Q1F15 earnings report. SNC‐Lavalin Group Inc. (SNC, +10.6%) was the second biggest influence on the sector in April in terms of absolute point contribution (+9.7 points) as it won a Montreal bridge contract, shook up management, and was upgraded by one equity research analyst. The Consumer Discretionary sector had 9 of its 24 constituents rise last month, while the other 15 declined. Magna International Inc. (MG, ‐10.2%) was the biggest point lagger last month. Thomson Reuters Corp. (TRI, ‐3.5%) was the second‐biggest lagger, declining from a 52‐week high in mid‐April after an RBC Capital Markets analyst downgraded the stock. Valeant Pharmaceuticals International Inc. (VRX, +4.6%) was the main driver of the sector’s positive performance last month, as Q1F15 earnings beat estimates and the company raised its profit guidance. Of the 4 constituents of the Telecommunications Services sector, Rogers Communications Inc. (RCI/b, +1.7%) and Manitoba Telecom Services Inc. (MBT, +8.2%) were the two gainers, while BCE Inc. (BCE, ‐0.8%) and TELUS Corp. (T, ‐0.8%) declined in value. 
Of the Consumer Staples sector’s 10 constituents, only 2 gained through April, while the other 8 declined. Alimentation Couche‐Tard Inc. (ATD/b, ‐8.5%) accounted for ~87% of the sector’s decline. 5 of this sector’s 9 constituents rose through April, with CGI Group Inc. (GIB/a, ‐5.5%) and Constellation Software Inc. (CSU, +8.1%) bookending point contribution. The Utilities sector saw 7 of its 12 constituents rise through April. In a rather uneventful month for the stock, Fortis Inc. (FTS, +1.8%) nonetheless contributed the most to the sector’s point gain. ‐0.2% ‐3.0% 58 of the Energy sector’s 63 constituents rose through April, while the other 5 declined. In aggregate, the Energy sector rose relatively consistently during the first half of the month before levelling off for the latter half, roughly tracking the recovery in the price of crude oil. Suncor Energy Inc. (SU, +6.2%) was the biggest point contributor to the sector through April. Encana Corp. (ECA, +21.2%) was the second biggest point contributor, benefitting from favourable analyst rating changes at Bank of America and Morgan Stanley. 
4.6% of S&P/TSX Composite Consumer Staples Of the 47 constituents as at month end, 27 rose through the month, while 20 declined. Canada’s five biggest banks were also the five biggest point contributors to the Financials sector in April, each rising 4.4% and contributing 11.1 points to the sector through the month, on average. Despite announcing a 6% dividend increase, Brookfield Asset Management (BAM/a, ‐4.1%) was the sector’s biggest point detractor after raising US$1B+ in an equity offering toward the end of April. 
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Portfolio Advisory Group S&P 500 Index Performance Review – April 2015
ScotiaMcLeod Portfolio Advisory Group – Monthly S&P 500 Index Performance Review April 2015 – U.S. GDP Growth Hits The Brakes
During First Quarter
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The S&P 500 Index rose 0.9% through April on a price‐
only basis. With 502 stocks in the index at month end, 232 rose, 271 declined, when taking into consideration the replacement of 1 constituent during the month. 2015 Index Returns (price only)
April
YTD
S&P 500 Dow Jones Industrial Average NASDAQ Composite Russell 2000 +0.85% +1.29% +0.36% +0.10% +0.83% +4.34% ‐2.61% +1.28% 
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Each of the NASDAQ Composite, Russell 2000, and Dow Jones Industrial Average indices underperformed the S&P 500’s gain in April. Top 10 Point Contributors
In USD terms, the S&P 500 index’s 0.9% price‐only gain 
underperformed the resource‐heavy S&P/TSX index’s 
7.1% price‐only gain. GDP data released on April 29th conveyed that the U.S. economy barely grew in the first quarter, causing the 
S&P 500 Index to decline 1.02% that day as the print 
led investors to expect a higher probability that the 
Federal Reserve will leave rates unchanged for a relatively longer time. 
U.S. equities have also been influenced by first quarter earnings reports. While earnings have been modestly 
better than expected, expectations were quite low. 
Revenue trends and earnings guidance have been relatively weak as the strong U.S. dollar remains a 
headwind for many companies and that has driven 
ongoing volatility in equities. 7.0%
Top 10 Point Detractors
Microsoft Corp. (+7.4) 
Biogen Inc. (‐1.3) General Electric Co. (+2.6) 
The Home Depot Inc. (‐1.0) Amazon.com Inc. (+2.1) 
Facebook Inc. (‐0.8) Schlumberger Ltd. (+1.6) 
Wal‐Mart Stores Inc. (‐0.7) Philip Morris International Inc. (+1.4) 
UnitedHealth Group Inc. (‐0.7) Chevron Corp. (+1.3) 
Procter & Gamble Co. (‐0.7) 
Celgene Corp. (‐0.7) 
Actavis PLC (‐0.7) Exxon Mobil Corp. (+1.1) 
International Business Machines (+1.1) Berkshire Hathaway Inc. (‐0.6) 
3M Co. (‐0.6) AT&T Inc. (+1.2) JPMorgan Chase & Co. (+1.1) Energy
6.6%
6.0%
5.0%
Telecom
4.7%
4.0%
April 2015 Monthly S&P 500 Index Performance by Sector (Price Only)
Materials
3.1%
3.0%
Info Tech
2.3%
2.0%
S&P 500
0.9%
1.0%
Financials
0.1%
0.0%
Industrials Cons.
‐0.1% Discretionary Utilities
‐0.5%
‐0.1%
‐1.0%
‐2.0%
Source: Bloomberg
Cons. Staples Healthcare
‐1.4%
‐1.0%
Portfolio Advisory Group S&P 500 Index Performance Review – April 2015
Sector
Monthly
price-only
return Monthly
total
return
Notable Movement
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Information Technology +2.3% +2.3% 
19.95% of S&P 500 Index 
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Financials 16.14% of S&P 500 Index +0.1% +0.2% 
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Healthcare 14.60% of S&P 500 Index ‐1.4% ‐1.3% 
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Consumer Discretionary ‐0.1% 0% 
12.47% of S&P 500 Index 
Industrials 10.27% of S&P 500 Index Consumer Staples 9.51% of S&P 500 Index 
‐0.1% ‐1.0% 0.0% ‐0.8% 
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Energy 8.49% of S&P 500 Index Materials 3.22% of S&P 500 Index Utilities 3.00% of S&P 500 Index +6.6% +6.7% 
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+3.1% +3.1% 
‐0.5% ‐0.5% Telecommunications +4.7% +5.8%
Services 2.34% of S&P 500 Index 
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The Information Technology sector had 33 of its 67 constituents rise through April, while the other 34 declined. Performance of the sector displayed an upwards trend until April 28th, after which it fell 2.1% in the final two trading sessions. Microsoft Corp. (MSFT, +19.6%) contributed the most points to the sector through April after the company beat estimates of their Q3F15 EPS by ~17% International Business Machines (IBM, +6.7%) was the second biggest point contributor. Facebook Inc. (FB, ‐4.2%) detracted the most points from the sector after falling 7.4% over the last 6 trading sessions of the month. 39 of the Financials sector’s 87 constituents gained through April and 48 declined, when considering the addition of one constituent during the month. JPMorgan Chase & Co. (JPM, +4.4%) was the sector’s biggest contributor through March. Berkshire Hathaway Inc. (BRK/b, ‐2.2%) and Simon Property Group Inc. (SPG, ‐7.2%) were the top two detractors of the Financials sector. The Healthcare sector had only 16 of its 55 constituents rise through the month, with the other 39 declining. Biogen Inc. (BIIB, ‐11.4%) was the sector’s biggest influencer as well as its biggest point detractor, due to the company reporting first quarter EPS figures that missed analysts estimates due to lower sales of its Tecfidera drug. AbbVie Inc. (ABBV, +10.5%) contributed the most points to the sector. 28 of the Consumer Discretionary sector’s 85 constituents gained in April, while the other 57 declined. The Home Depot Inc. (HD, ‐5.8%), Lowe’s Cos Inc. (LOW, ‐7.4%), and The TJX Cos Inc. (TJX, ‐7.9%) were the top three point detractors of the sector. Amazon.com Inc. (AMZN, +13.4%), Netflix Inc. (NFLX, +33.6%), and The Walt Disney Co. (DIS, +3.7%) were the sector’s top point contributors; Amazon’s stock price surged 2.8% on April 24th after the company reported first quarter sales that rose 15% q/q, while Netflix gained, despite a big earnings miss, after reporting higher than expected net additions to both domestic and international streaming channels. The Industrials sector saw 29 of its 65 constituents gain through April, with the other 36 declining. 3M Co. (MMM, ‐5.2%), The Boeing Co. (BA, ‐4.5%), and Lockheed Martin Corp. (LMT, ‐8.1%) were the top three detractors of this sector last month. General Electric (GE, +9.2%) was by far the most influential stock on the sector’s performance during April, contributing the most points thanks to it plans to exit the bulk of its lending business, including a $26.5 billion sale of most of its real estate, as the CEO refocuses the company on its industrial roots. 12 of 38 this sector’s constituents gained in April, while the other 26 declined. Philip Morris (PM, +10.8%) was the sector’s biggest contributor in April as the company benefitted from increasing its 2015 EPS forecast. Wal‐Mart Stores Inc. (WMT, ‐5.11%), Procter & Gamble Co. (PG, ‐3.0%), and CVS Health Corp. (CVS, ‐3.8%) were the sector’s top point detractors. The Energy sector saw 37 of its 41 constituents gain in April, with the other 4 declining, as it displayed an upwards trend rather consistently through April. Schlumberger Ltd. (SLB, +13.4%) was the Energy sector’s top contributor during April, followed by Chevron Corp. (CVX, +5.8%) as the second top contributor. The sector benefitted from higher crude prices, as oil was up approximately 25% in the month of April. The Materials sector had 20 of its 29 constituents rise during April. LyondellBasell Industries (LYB, +17.9%) was the top point contributor as the company reported strong Q1 results and confirmed it is seeing improved profitability across the company. 13 of the Utilities sector’s 30 constituents rose through April, with the other 17 declining, as Duke Energy Corp. (DUK, +1.0%) and NextEra Energy Inc. (NEE, ‐
3.0%) bookended point influencers. Every constituent of the Telecommunications Services sector except 1 gained in April. AT&T Inc. (T, +6.1%) contributed the most points to the sector after reporting significantly increased expected cost synergies from the proposed acquisition of DIRECTV. Portfolio Advisory Group Portfolio Advisory Group
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November 5, 2014