September 2021 capital markets outlook and risk metrics

September 2021


  • In August, large cap US equity indices posted strong, positive returns, whereas performance degraded further down the market capitalization spectrum.
  • US large cap growth stocks outperformed value stocks; however, US mid cap and small cap value stocks generally outperformed growth stocks.
  • Outside of the US, stocks posted positive returns.
  • Across the credit and duration spectrum, US fixed income markets posted mixed returns during August. High Yield bonds and bank loans outperformed government and TIPS bond indices.
  • The Bloomberg Commodities Index posted a negative return for the month while REITs posted positive returns. REITs have posted among the strongest year-to-date performances.
  • The US vaccination efforts combined with the American Recovery Act have lifted 2021 GDP forecasts for the US to 6.5%. However, the Delta variant and some concerns regarding the duration of the vaccine efficacy may weigh on growth through the end of the year.
  • The continued march of US equities toward new records implies that the markets are looking past COVID, despite a less-than full recovery to pre-COVID levels of economic activity.
  • Investors continue to focus their thoughts on Fed policy and the Biden administration’s fiscal agenda, with a particular focus on economic stimulus, taxation, regulation, and broad infrastructure spending.