Strong second quarter earnings helped stocks to yet another solid month of performance in August, as domestic and foreign equity markets advanced 2.85% and 1.90%, respectively. The S&P 500 index has had seven straight months of gains, reaching new highs on more than 50 days … and all this without at least a 5% decline along the way..
Domestic stocks ended July with modest gains, as the S&P 500 Index registered its fifth straight monthly advance. Foreign markets were slightly negative, hurt mostly by sizable losses in Chinese equities. Overall, a globally diversified portfolio finished the month in positive territory … but only by a whisker.
Global stock markets advanced yet again in June, finishing up a very profitable first half of 2021 for equity investors. Domestic stocks led the way with returns in excess of 15% over the past six months, while foreign stocks delivered high single-digit returns. After reaching pandemic lows in late March of 2020, the S&P 500 Index has advanced more than 50% over the past five quarters.
Domestic stocks have performed extremely well over the past decade. In fact, U.S. stocks have been compounding at an annualized rate of 13.8% over the past ten calendar years … not to mention the 15% gain during the first six months of 2021.
Global stock markets advanced for the fourth straight month, generating returns of just over 1% during May. Foreign stocks led the way with gains of approximately 3% for the month, while domestic stocks closed with more modest gains. Year-to-date, global markets have gained nearly 11% … led by the stocks of smaller and more economically sensitive companies.
Global stock markets had another solid month, generating returns in excess of 4% during April. Domestic stocks led the way, thanks to strong corporate profits, ongoing government stimulus, and progress on vaccinations.
The $1.9 trillion stimulus bill is more of the same, emergency measures and safety-net expansions. These trends have been with us for the past forty years … under presidents of both parties … as federal income support rose by more than half to 4.3% of GDP from 1979 to 2019.
Stock markets continued their advance during March, closing out another strong quarter for equity investors. U.S. stocks lead the way with returns of nearly 4% in March and more than 6% for the quarter. Foreign equities were up just over 1% for the month and about 3.5% for the quarter. With quarterly returns in excess of 12%, domestic small-cap stocks were the big winners.
February was a month full of good news. The economy continued to gain strength, vaccine doses were on the rise, a new stimulus package was on the horizon, and the Fed (yet again) pledged to maintain its easy-money policies. For most of the month, equity markets were embracing the optimism.
Stocks started the new year off with strong gains, but ended January with the worst weekly declines since October. When the dust had settled, global stock measures were only slightly off for the month.