Seven Straight Months of S&P 500 Gains

Monthly Market Snapshot: August 2021

Highlights

Despite investors’ concerns that a market correction may be nearing, the S&P 500 delivered its seventh straight month of consecutive gains in August. The wall of worry continues to be climbed. Even emerging markets, which suffered a 6.4% pullback mid-month, managed to close out the month 0.6% higher. Excluding China, emerging markets rose 2.5% in August. The 10 year U.S. Treasury yield rose modestly from 1.22% to 1.30%.

The Fed’s virtual Jackson Hole policy retreat drew lots of attention, but did not change the narrative much. The consensus still expects a tapering announcement to occur in the next meeting or two and for tapering to start by the end of 2021. The August employment report is due later this week and may hold the key on whether or not the tapering announcement comes in September. However, Chair Powell’s statement that, “We have much ground to cover to reach maximum employment,” suggests that policy will remain accommodative for some time and the first rate hike is likely at least a year away. Probably more.

Citi’s Global Investment Committee (GIC) left its allocation to Global Equities at a 8% overweight with a concentration in Global Healthcare and Fixed Income and Cash is a 8% underweight. The GIC recommends holding 10% of medium-risk portfolios in stocks with consistent dividend growth.