Market Commentary September 2021

 

GLOBAL MARKETS

Major global equity markets all showed positive returns in August, led by the US and Japan. Emerging market returns were driven by India, China and Brazil.

US MARKETS

Reached new highs…

US equities reached new highs again in August, returning +3.0% over the month. The rise was broad, taking in both technology stocks and more defensive sectors. However, a range of indicators suggested a reduction in confidence moving into the Autumn period. Analysts’ forecasts continue to reflect the expectation that S&P 500 earnings will continue to grow at double-digit rates until 2023. However, the University of Michigan consumer sentiment index has collapsed to a ten-year low, suggesting that the boost from ending lockdown may be over.Up 3.0% (US 500)

EUROPEAN MARKETS

Positive returns…

Returns across the continent were almost universally positive, with strong rises in several of the peripheral European markets. The major developed nations were more muted, with rises limited to 3% or less. The overall return from the Stoxx Euro 600 Index was +2.0%. Manufacturing surveys taken early in the month showed the lowest levels since January. However, the fact that stocks have not shown the pattern of weakness that usually follows a US PMI peak, may suggest that the European markets are more firmly underpinned. MSCI Europe has now beaten the World ex US by over 10% in six months.
Up 2.0% (Euro 600 Index)

UK MARKETS

Midcaps lead the way….

UK equities were led, once again, by the FTSE Mid-250 Index, despite Sterling weakness during the month. After July’s +2.5% return, driven by travel stocks, August saw the Index add a further 5%, driven primarily by bid-speculation, following a bidding war for aerospace supplier, Meggitt. Outside of the mid-cap part of the UK market, large and small-cap indices were also positive, with just a +1.24%s return from the FTSE 100 Index, which is still languishing below its pre- Covid level. Fears of supply problems due to Covid and Brexit weighed on shares, as did the growth in Delta-variant cases.
Up 2.0% (UK All Share)

ASIAN MARKETS

Bounced back strongly…

Asian markets bounced back strongly in August, with Japanese shares gaining 3.1% and the Chinese Shanghai Composite Index rising by 4.3%. After recent weakness, stocks in the region were buoyed up by bargain hunting. Both developed and emerging markets in the region were stronger. Progress in Asia, where corona virus cases have been rising again in recent weeks, was helped by the full approval of the Pfizer/Biontech vaccine. Wall Street’s strength also helped to underpin the Asian markets, as fears of imminent Fed tapering to be announced at Jackson Hole subsided.
Up 1.9% (Asia Index)

DISCLAIMER – The value of investments and the income from them can go down as well as up and past performance is not a guide to future performance. Returns are in local currency unless indicated otherwise. Source: Bloomberg.

 

DISCLAIMER – The value of investments and the income from them can go down as well as up and past performance is not a guide to future performance. Returns are in local currency unless indicated otherwise. Source: Bloomberg.

 

Key Points
• US equities continued higher, reaching new all-time highs during August.
• Global markets breathed a sigh of relief as fears of imminent Fed tapering receded.
• Confidence measures have weakened whilst earnings forecasts remain robust.
• Asian markets rebounded strongly, led by Japan and China.
• UK stocks were up overall, driven entirely by the mid-cap section of the market.

DISCLAIMER – The value of investments and the income from them can go down as well as up and past performance is not a guide to future performance. Returns are in local currency unless indicated otherwise. Source: Bloomberg.

 

 

Key Points
• Sterling weakened, as the UK recovery was threatened by supply shortages following Brexit and Covid-19.
• The dollar was generally stronger, on expectations of Fed tapering, but gave back a little of that strength near the month end.
• An improving vaccination programme in Europe helped to support recovery hopes and the Euro, which edged up against a weaker pound.
• The yen rallied along with Asian equity markets, as a safe haven currency.

DISCLAIMER – The value of investments and the income from them can go down as well as up and past performance is not a guide to future performance. Returns are in local currency unless indicated otherwise. Source: Bloomberg.

 

 

Key Points
• Global government bonds were generally weak, with gilts losing 0.8%.
• European government bonds were the only major market to see small gains.
• Investment grade bonds similarly struggled and returned small losses.
• High yield bonds were the only global bond market sector to gain, with a rise of 1.7%. Other bond returns were generally negative, but appear positive due to weaker Sterling.

DISCLAIMER – The value of investments and the income from them can go down as well as up and past performance is not a guide to future performance. Returns are in local currency unless indicated otherwise. Source: Bloomberg.

Disclaimer: The information contained in this report is for illustrative purposes only and should not be construed as a solicitation nor offer, nor recommendation to acquire or dispose of any investment. Specifically, the share class used to create the illustrations may not be available on all platforms nor be suitable for individual investors. This report was produced by Collidr Research (“Collidr”) for Affinity Integrated Wealth Management (AIWM) and while AIWM and Collidr use reasonable efforts to obtain information from sources which they believe to be reliable, neither AIWM nor Collidr make any representation that the information or opinions contained in this report are accurate, reliable or complete. The information and opinions contained in this report are subject to change without notice. Model returns are calculated using the most appropriate share class of the underlying funds, having regard to the illustrative nature of the report, with all income being reinvested. As a result, real portfolio performance may vary from model performance. Where model portfolio histories are shorter than three years, historic model returns are substituted prior to inception date with returns from an Collidr performance benchmark. This benchmark is constructed from the average returns of all Collidr portfolios with similar risk profiles that existed during that time. The value of investments and the income from them can go down as well as up and past performance is not a guide to the future performance. Affinity Integrated Wealth Management is a trading style of Buryfield Grange Limited, Buryfield Grange Life Planning Limited and Affinity Integrated Wealth Management Ltd. ‘Buryfield Grange Limited’ is authorised and regulated by The Financial Conduct Authority. Not all services provided by Buryfield Grange are regulated by the Financial Conduct Authority. ‘Buryfield Grange Limited’ is registered in England and Wales at Inspire House, 20 Tonbridge Road, Maidstone, Kent, ME16 8RT. Company registration number 4568338. Collidr Research is a trading name of Collidr Technologies Limited, registered in England and Wales at 34 Southwark Bridge Road, London, SE1 9EU. Company registration number 09061794. Data Providers: Bloomberg L.P. and Collidr.

 

 

 

 

 

 

 

 

 

 

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