capital markets commentary

Market Update as of April 30, 2021

May 2021

Investment returns were strong in April as equities were elevated by robust quarterly corporate earnings, while fixed income returns were assisted by bond yields that edged lower. Commodities have continued to rally in 2021 as prices for key raw materials have climbed sharply, fueled by announced post-pandemic recovery and infrastructure programs as well as growing demand from China.

Capital Markets Update Q1 2021

April 2021

Despite periods of significant volatility in the first quarter, global equities and risk assets posted positive returns, while fixed income markets were broadly negative in the face of rising interest rates. The “reflation trade”, which began in late 2020, continued into the first quarter of 2021 driven by increased vaccine availability and another round of U.S. stimulus measures. Cyclical sectors such as energy, financials and industrials, along with small companies, benefited the most in this environment. Conversely, large technology companies, defensive sectors and healthcare stocks generally underperformed the market in the first quarter.

Market Update as of March 31, 2021

April 2021

Equity markets were largely positive in February. Rapidly rising treasury yields and continued optimism surrounding post-pandemic normalization resulted in a rotation towards value and small-cap equities. The steeping yield curve pushed fixed income prices lower, particularly longer duration bonds. Within commodities, tighter supplies and weather events across Texas contributed to energy returns while economic recovery projections have boosted industrial metals.

Market Update as of February 28, 2021

March 2021

Equity markets were largely positive in February. Rapidly rising treasury yields and continued optimism surrounding post-pandemic normalization resulted in a rotation towards value and small-cap equities. The steeping yield curve pushed fixed income prices lower, particularly longer duration bonds. Within commodities, tighter supplies and weather events across Texas contributed to energy returns while economic recovery projections have boosted industrial metals.

Market Update as of January 31, 2021

February 2021

Global markets opened the year mixed, affected by uncertainty and volatility surrounding the retail investor frenzy and an unclear outlook for deploying coronavirus vaccines. The equity market was paced by U.S. small cap and emerging markets. Rising yields hampered fixed income returns while the energy market experienced a strong month as a result of tighter supplies.

Capital Markets Update Q4 2020

January 2021

Fueled by the pandemic, 2020 began with extraordinary market volatility through March 23. After markets bottomed, equities steadily recovered to reach all-time highs by year-end. Forceful central bank monetary policy and massive fiscal expenditures to combat the economic effects of COVID-19 boosted stocks. As central banks ramped up quantitative easing and interest rates declined, bonds experienced a substantial rally. Companies with the ability to quickly adapt or those already positioned for a remote world saw the largest gains demonstrated by the dominance of the technology sector.

Investment Outlook 2021

January 2021

This Investment Outlook updates Ellwood’s asset classes views expressed in our Mid-Year Investment Outlook, published in July 2020. The world will be in a period of transition during 2021—optimistically moving from alarming levels of COVID-19 infections to a growing percentage of the population vaccinated. While we will not be surprised by bouts of volatility including larger equity drawdowns, Ellwood sees a continuation of the economic recovery, buoyed by supportive monetary and fiscal policies.

Market Update as of December 31, 2020

January 2021

Global markets ended a tumultuous year with many global indices at or near all-time highs. Investors maintained a risk-on investment posture during December, supported by new stimulus packages in Europe and the US, alongside the launch of each regions vaccination program. Gold and energy prices appreciated as gold posted the biggest annual advance in a decade, aided by the dollar’s decline to the lowest mark since April 2018.

Market Update as of November 30, 2020

December 2020

Encouraging news regarding impending COVID-19 inoculations and further clarity on the U.S. presidential transition dramatically boosted stocks across the global markets, with many surpassing all-time highs. U.S. small cap equities paced the markets with the Russell 2000 Index producing its best month on record. Energy prices also participated in the vaccine optimism, climbing in November, while gold prices experienced the worst month in over four years.

Market Update as of October 31, 2020

November 2020

Global risk assets mostly retreated in October on the back of rising new coronavirus cases in the U.S. and Europe, fresh lockdowns in Europe, signs of a tightening election in the U.S., and the absence of any progress towards a pre-election fiscal stimulus. Energy returns once again declined with oil prices hitting four-month lows on demand concerns.