The good news is U.S. equity markets were positive in the third quarter of 2021. This is the sixth consecutive quarter of positive returns from the S&P 500 Index.
Right Back Where We Started
The bond market for the quarter can be described like the journey of a billionaire astronaut, going up then down, and ending in the same place.
Affirming the Moderation
For investors, particularly equity investors, the past 15 months have been extremely rewarding. Over that time, domestic stocks have risen sharply as the Russell 1000 Index of large capitalization domestic stocks returned 34.9% and the small capitalization segment of the domestic equity market, as measured by the Russell 2000 Index, delivered an even more impressive return of 43.4%.
Easing Off the Accelerator
With continued progress being made in the fight against the coronavirus, GDP growth in the United States continues its recovery and has been moving higher at a rapid clip.
Equity Performance Review
Equity markets continued their rise during the second quarter. U.S. equities advanced 8.2% as large caps outpaced small caps 8.5% versus 4.3%.
Bonds Bounce Back
After posting the worst quarterly decline since 1981 in the first quarter, it should not come as a shock the sector bounced back during the second quarter.
In the recently released Q1 2021 Investment Insight newsletter, we commented that no changes were being made to the asset allocations being utilized across client portfolios.
Hitting on All Cylinders
With the recent one-year anniversary of the equity market indices’ pandemic driven lows, it seems appropriate to review what has transpired since that momentous event.
Standard & Poor’s 500 (S&P 500) Index’s first quarter 2021 performance of 5.8% has contributed to the index being up 19% from its pre-pandemic peak. This is the fourth consecutive quarter of positive performance for U.S.
The Worst Is Behind Us
Bond markets posted a decline of 3.4% this quarter – their worst return since 1981, as the 10-year U.S. Treasury climbed to a 1.7% yield from 0.9% at year-end.