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In this issue:
- Global Equity Market Performance
- March
- The S&P/TSX 60
- April So Far
- Wrapping Up
Global Equity Market Performance
After impressive gains in February, MSCI EAFE and MSCI Emerging Markets had a bad March. They both gave back more than they had gained the prior month, falling 5.8% and 7.4% respectively. The S&P 500 continued its losing streak and added another 5.3% in losses. The S&P/TSX 60 continued to outperform, although this month it was by losing less than the others, down 3.2%.
This is the second year in a row that, after the first quarter, the S&P 500 was down while the other three indexes were up.
As of this writing—the second week of April—our systems are indicating positive momentum in all four equity markets although there are still some signs of caution in the shorter-term signals.
If you would like to stay current on our measures of trend and momentum in the markets we follow, please click here.
For the first two months of the year, the S&P/TSX 60 advanced while the S&P 500 declined. Although they were both down in March, the S&P/TSX still outperformed. In this month’s note we’ll have a look at how this year’s performance of the S&P/TSX 60 is similar but different to 2025.
March
Last year, we attempted to answer the question: Is there any truth to the idea that March is generally a bad month for stocks?
This is worth revisiting, considering that March 2026 ranked among the ten worst March performances on record, just ahead of 1945 which was down 4.8%. And March 2025 was the ninth worst performance for the S&P 500 since 1928, down 5.7%.
Note that after the 2020 debacle, March was up more than 3% for four years in a row.
Over the past 99 years, March has been down 39% of the time—very close to the long-term average of 40% for any given month. Its average return ranks ninth out of the 12 months, while its median return ranks seventh.
This means March has produced a few extreme negative outliers over the decades. For example, it posted the second-worst monthly performance on record in 1938, surpassed only by September 1931.
In summary, while March has had some very bad results, it doesn’t consistently stand out.
Extreme results may give rise to the question in the first place—they tend to stick in the memory. Another factor that may contribute is the annual “spring forward” to Daylight Saving Time (DST).
In the same letter we referenced a 2000 paper published in the American Economic Review, titled “Losing Sleep at the Market: The Daylight Saving Anomaly.” It found a statistically significant negative impact on markets over the weekends after the shift to DST.
Other studies have attempted to estimate the broader economic cost of changing the clocks. Automobile accidents, workplace injuries and overall bad decision-making are associated with the loss of sleep and coincide with DST.
When you combine the cognitive effects of the clock change with a few memorable bad months, it’s easy to understand why March has developed a negative reputation.
2026 shares more similarities with 2025 than just the month of March alone.
The S&P/TSX 60
By the end of March 2025, the S&P/TSX 60 had outperformed the S&P 500 by more than 6%. This year it is ahead by almost 8%.
The trend continued through 2025. By the end of September 2025, the S&P/TSX 60 was up 22.4%, compared with 12.5% for the S&P 500.
In our October 2025 letter we looked at the main drivers behind this outperformance.
The short version:
- Gold miners contributed 11.8% to the index return, or more than half
- Canadian banks contributed 6.9%
- Shopify (SHOP) contributed 2.7%
- These twelve companies contributed 21.3%, or almost all of it
So far this year, the performance is similar. But if you dig into it, it’s different.
Here is the sector breakdown of the S&P/TSX 60 from Global X Investments, ETF manager of HXT, a core holding:
Let’s look at the performance of the top three sectors along with oil and gold.
As of the end of March, oil is up 76% on the year and XEG iShares S&P/TSX Capped Energy ETF is up 41%.
Gold is up almost 8% this year and XMA iShares S&P/TSX Capped Materials Index ETF is up 10%. 73% of XMA is gold miners.
XFN iShares S&P/TSX Capped Financials Index ETF is down 2%.
If you multiply the sector weights by their returns you get 8.7%, while the index itself is up 2.9%.
Similar performance in both years, versus the tech-heavy S&P 500, but for different reasons. That’s a good illustration of diversification.
April So Far
On April 2, the Wall Street Journal reported that the Baltic Dirty Tanker Index, which prices the cost of shipping oil, had reached a record of 3,737. It was 1,000 for most of 2025. West Texas Intermediate crude oil has been swinging violently between US$85 and US$115 since early March, seemingly driven by social media posts from the White House.
Bloomberg reported that on April 8, Treasury Secretary Bessent and Federal Reserve Chairman Powell held an emergency meeting with the CEOs of the big six banks. The topic was the cybersecurity risks posed by Anthropic’s new AI model, Mythos. It’s probably nothing. Jamie Dimon, CEO of JPMorgan, couldn’t attend due to prior commitments.
This AI boom is having some interesting consequences. In the February letter we looked at the impact on software companies and private credit. Blue Owl (OWL), one of the larger private credit fund managers, is down 35% since.
Note, Fed Chairman Powell stated on March 30 that there was nothing to worry about in the private credit arena. See the date of the above emergency meeting.
Intel (INTC) is up 44% on the month so far on news of a chip supply deal with xAI, Space X and Tesla. According to Bloomberg, that’s the best nine-day performance for a public company since 1971. On April 14 it closed at 63.81. In 2000 its high was 75.
As of April 14, both the S&P 500 and S&P/TSX 60 have regained their March losses.
Wrapping Up
The supposed March effect on stocks doesn’t hold up particularly well over the 99 years we studied. Although it’s held up—or rather, held down—the past two years. It’s similar to how people associate October with poor performance, when September is actually worse.
People tend to remember big events and forget the mundane. Shakespeare might have something to do with March’s reputation as well. It’s important to do the math.
As we pointed out in last month’s letter, diversifiers don’t always work but they should do their job over time. This past month, energy stocks did theirs. So far, the performance of the S&P/TSX 60 compared to the S&P 500 looks similar to 2025 but for different reasons.
Last month we ended the letter with: Let’s Go Blue Jays. That was a bad idea. While they won their first three games, it’s been a struggle since.
As Yogi Berra may (or may not) have said: It’s déjà vu all over again.
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