Stock Market Commentary -

Thanks in part to vaccine rollouts, reopening, and monetary stimulus, the U.S. economy looks to be back on track. Along with the recovering economy, solid corporate balance sheets and robust corporate earnings growth led equity markets upward during the second quarter of 2021. The S&P 500 hit another all-time high and gained 8.55% for the quarter. Global markets also improved, with developed international and emerging market stocks up 5.35% and 5.08%, respectively. In the United States, every sector turned in positive performance in the first half of the year, though first quarter’s laggards were generally the leaders in 2Q21. Growth stocks leapt to the forefront, while value stocks faded as investors came to believe that the inflation and supply-chain issues may indeed be “transitory.” The S&P 500 Value Index (SVX) still outperformed on a year-to-date (YTD) basis, returning 16.29%. REITs was the best-performing sector, up 13.24%, representing a strong rebound after a difficult 2020. The utilities sector trailed the overall market by -0.41% for the quarter, as the economy continues to expand. Strong demand for homes and continued low interest rates have fueled the U.S. housing market for more than a year, and home prices are expected to remain elevated.

Speculative excesses remain in areas such as cryptocurrencies, special purpose acquisition companies (SPACs), and “meme” stocks traded by retail investors. Regardless of the volatility associated with these speculative assets, 2021 appears to be positioning itself as a strong year for the broader global and U.S. equity markets.