First quarter 2021 capital markets outlook

May 2021


  • The advent of ambitious global vaccination campaigns has begun to shift market focus to repricing of cyclical stocks, commodities, and real assets that may benefit from economic growth.
  • The rotation to value and cyclical stocks took a pause so that growth stocks outperformed value stocks in the month of April as the Russell 1000 Growth Index outperformed the Russell 1000 Value Index.
  • Developed markets outside of the US outperformed emerging market equities, and like the US, growth outperformed value.
  • The MSCI China index continued its underperformance with a 1.4% return in April.
  • Fixed income markets posted modest positive returns as the yield curve steepened rapidly to reflect higher inflation expectations.
  • The Barclays TIPS index returned 1.4% in April and the Barclays 1-3 Year TIPS Index posted a 0.6% gain.
  • Commodities and related stocks posted gains, with the Bloomberg Commodities index returning 8.3% and the S&P Global Natural Resources Index returning 4.1%.
  • Global infrastructure stocks likewise posted positive returns in April, with the DJ Brookfield Global Infrastructure gaining 4.7% and the S&P Infrastructure index returning 3.8%.
  • Global REITs have continued to recover from steep 2020 losses, with the MSCI US REITs and FTSE NAREIT Equity Index both of which returned 8.1% in April.