Guess which market was January’s positive performer?

It was no shock that the major markets took a hit in January, although as mentioned in my early January blog, I expected the correction to be in early February ( https://www.valuetrend.ca/?p=2718.). Asia was hit hardest, while Europe was in line with the US losses.Here are a few worldwide market statistics, taken as of January 30^th by stockcharts.com (thus, they will be slightly off for the entire month):

Major Asian/Pacific markets

Nikkei -7.88%

Hang Seng -5.2%

Shanghai -3.07%

ASX (Australia) -2.96%

Major European markets

DAX (Germany) -1.87%

CAC (France) -2.24%

FTSE (London) -2.86%

Emerging

Bovispa (Brazil) -8.28%

Major North American markets

S&P500 -2.55%

TSX 300 +1.13%

So—despite our tanking loonie, the Canadian market was a world leader–chart above.  What drove the Canadian market higher? It may surprise you to hear that it wasn’t the major sectors that comprise our index leading the charge.  In fact, two of our “big three” –  Energy and Financials were losing sectors in January. The third of the big three, Metals and Mining, did well. But the real movers were more diversified than usual – leading sectors were Healthcare, Technology and Utilities. Two of these sectors (Metals, Utilities) were losers in 2013. Perhaps there is some bargain hunting going on by value-seeking investors.

When speaking at the Oakville library seminar last Thursday, participants asked what might push the TSX higher, given that indices reliance on the big three sectors mentioned above. My answer was – I don’t think that the TSX index itself will be a good place to be relative to the US. However, there are a few overlooked and undervalued stocks that can offer even more opportunity than many of the US stalwarts. I mentioned a few of ValueTrend’s gems, such some of the pipelines and mid-caps. Additionally, watch for rotation within the Canadian market into former basing securities –as seen within the metals and healthcare sectors noted above. I’ve said it before, and will say it again – it’s a stock pickers market now. And technical analysis can help you pick the next winner.

Keith speaking at the Orangeville Library tomorrow (Tuesday February 4^th) at 7:00pm.

If you live anywhere near that area, please come out and join in on the discussion. Admission is free.