Insights

Most risk assets posted strong returns in August, despite the ongoing spread of the COVID-19 Delta variant, cooling incoming economic data, and anticipation that the Federal Reserve (Fed) will shift its accommodative posture by year-end. 

Growing concerns surrounding the increased spread of COVID-19 variants and the potential for renewed containment measures helped drive underperformance across many areas of the market in July that have benefitted from the strong economic growth tailwinds since spring 2020.

The second quarter of 2021 saw perhaps the greatest move toward the loosening of COVID-19 restrictions worldwide, as well as the strengthening of vaccination campaigns globally.

May presented investors with broad-based gains across most major asset classes and categories, as the ongoing resumption of global economic activity appeared to have gathered pace and sent inflation rates higher in the process.

Market performance spanning most major asset classes and categories appeared overwhelmingly positive in April, buoyed by continued economic momentum and ultra-accommodative policy measures.

The continued rollout of COVID-19 vaccinations and the associated resumption of global economic activity helped send risky asset prices, high-quality sovereign interest rates, and inflationary expectations significantly higher in the first quarter of 2021, with U.S.-based assets generally outperforming those internationally domiciled. 

Continued favorable conditions driven by ongoing positive developments on the COVID-19 vaccine front and the related reopening of the economy, alongside ample liquidity support, underpinned strong market performance in February and applied pressure to those sectors susceptible to interest rate increases.

Market performance was somewhat dispersed in the first month of 2021, following broad-based gains across most major corners of the market in 2020– particularly in the fourth quarter.

Amid several critical macro-related events– most notably the volatile U.S. presidential election and the Trump administration's subsequent challenges of the results– most major corners of the market continued to display positive momentum in the final quarter of 2020, which proved to be one of the most tumultuous years in recent memory.

Economic data released in November suggested the US economic recovery remained on track.

Economic data released in October suggested the US economic recovery remained on track.

Economic data released in September suggested the US economic recovery was beginning to slow.

Economic data released in August reflected continued economic recovery in the United States as COVID-19 cases declined nationally, including in various hotspots in the South and West.

Economic data released in July reflected a leveling off of economic momentum as COVID-19 cases continued to rise, and some reopening plans were rolled back.

Economic data released in June reflected solid improvement in economic activity from depressed levels, although high-frequency data suggested a slower trajectory as COVID-19 cases increased in late June.

The U.S. economy wrapped up 2019 with a batch of generally promising data as U.S.-China trade tensions died down. The Conference Board’s Leading Economic Index (LEI) rose 0.1% year over year in November, its slowest pace of growth since 2009. Even though LEI growth has slowed, the gauge is still positive year over year.

November data reflected moderating growth as the U.S. economy continued to battle trade worries. The Conference Board’s Leading Economic Index (LEI) rose 0.3% year over year in October, tying its slowest pace of growth since 2016. Even though LEI growth slowed, the gauge was still positive year over year, a good sign for the future of the economic expansion.

October economic data pointed to a slowing—but still growing—U.S. economy. The Conference Board’s Leading Economic Index (LEI) rose 0.4% in September, its slowest pace of growth since 2016. However, the LEI is still growing year over year, a good sign for the future of the economic expansion.

Economic data improved modestly in September as the U.S. economy stayed resilient against trade uncertainty. The Conference Board’s Leading Economic Index (LEI) was unchanged month over month in August after a strong July gain. The LEI rose 1.1% year over year, signaling future economic growth

U.S. economic data was mixed in August, reflecting the complicated macroeconomic environment in the midst of high trade uncertainty.The Conference Board’s Leading Economic Index (LEI) rose 0.5% month over month in July, the biggest gain since September 2018. The LEI rose 1.6% year over year, signaling future economic growth.

Consumers showed signs of strength in July’s U.S. economic data. Leading indicators fell month over month for the first time in 2019. Still, the Conference Board’s Leading Economic Index (LEI) rose 1.6% year over year in June. Even though leading indicators have slowed recently, the LEI continues to expand year over year, signaling future economic growth.

U.S. economic data moderated in June as trade tensions plagued the global economy. Leading indicators slowed, but remained largely resilient against trade headwinds. The Conference Board’s Leading Economic Index (LEI) rose 2.5% year over year in May, its slowest pace of year-over-year growth since January 2017. Still, the LEI is squarely in positive territory, signaling future growth.

U.S. economic data improved in May on balance, even as investors battled a resurgence in U.S.-China trade tensions. Leading indicators signaled low odds of a recession in the coming year. The Conference Board’s Leading Economic Index (LEI) rose 2.7% year over year in April. As a reminder, April’s reading was its slowest pace of year-over-year growth since February 2017. Still, the LEI is squarely in positive territory, which shows that leading data are signaling growth.

Green shoots appeared in U.S. economic data as the economy entered the second quarter. Leading indicators signaled low odds of a recession in the coming year. The Conference Board’s Leading Economic Index (LEI) rose 3.1% year over year in March, breaking a five-month slide in annual growth.

U.S. economic data were mixed in March, although leading indicators signaled low odds of a recession in the coming year [Figure 1]. The Conference Board’s Leading Economic Index, an aggregate of ten leading indicators, rose 0.2% in February for its first gain in five months and 3% year over year.

U.S. economic data were sound in February, even as confidence fell amid uncertainty from global trade and political headwinds. The Conference Board’s Leading Economic Index (LEI), an aggregate of ten leading indicators, declined 0.1% in January, but grew 3.5% year over year.

January’s reports painted a picture of a solid economy struggling with global uncertainty. The Conference Board’s Leading Economic Index (LEI), an aggregate of ten leading indicators, declined 0.1% in December, but grew 4.3% year over year for 2018. While the LEI declined for the month, positive yearover- year momentum signaled low odds of recession in the coming year.

Economic trends generally improved in December, even amid some of the most significant financial market volatility of the bull market. The Conference Board’s Leading Economic Index (LEI), an aggregate of ten leading indicators, increased 0.2% in November and 5.2% year over year.

Economic trends generally improved in November, even after strong gross domestic product (GDP) growth over the last two quarters. The Conference Board’s Leading Economic Index (LEI), an aggregate of ten leading indicators, increased 0.1% in October and 5.9% year over year.

Overall, October’s economic reports reflected solid U.S. economic growth and manageable inflationary pressures. The Conference Board’s Leading Economic Index (LEI), an aggregate of 10 leading indicators, increased 0.5% in September and 7.0% year over year, signaling low odds of recession in the coming year.

Overall, economic reports released in September— mostly reflecting economic activity in August— indicated solid U.S. economic growth without significant inflationary pressures, though wage gains bear monitoring.

Overall, economic reports released in August—mostly reflecting economic activity in July—indicated solid U.S. economic growth without significant inflationary pressures, even though evidence grew of some cooling from trade concerns.

Economic reports released in July 2018, largely reflecting economic activity in June, provided evidence of accelerating U.S. economic growth over the second quarter.

Economic reports released in June 2018, largely reflecting economic activity in May, showed continued solid economic growth in the U.S. and provided evidence of a pickup in growth from seasonally weak first quarter levels.

Economic reports released in May 2018, largely reflecting economic activity in April, showed continued solid economic growth in the U.S. and provided evidence of a pickup in growth from first-quarter levels that were depressed by seasonal factors.

Economic reports released in April 2018, largely reflecting economic activity in March, showed continued solid economic growth in the U.S. Growth did slow some in the first quarter, consistent with the historical seasonal trend, but showed signs of an April rebound.

Economic reports released in March 2018, largely reflecting economic activity in February, rebounded from subpar data released in February, putting the economy on track for solid but not spectacular first quarter growth. Improvements were seen more on the business side than the consumer side, although strong job growth continues to provide support for consumer spending...

Economic reports released in February 2018, largely reflecting economic activity in January, signaled continued steady growth though mixed with rising inflation. While a number of the reports missed consensus expectations, softening data were mostly attributable to givebacks following strong data in late 2017...

January 2018 saw December’s trend of above-consensus economic reports taper off, though the data suggests strong underlying fundamentals in the U.S. economy, supported by solid consumer spending. Fourth quarter growth in real gross domestic product (GDP) of 2.6% fell short of the more optimistic 3.0% forecast...

Economic reports released in December 2017, which mostly reflect economic activity in November, largely exceeded economists’ consensus expectations and suggested continued steady growth in the U.S. economy. Data pointed to an economy that picked up some speed from the 2.2% average pace of growth during the current economic expansion...

Economic reports released in October 2017, which mostly reflect economic activity in September, largely exceeded expectations throughout the month. The Citi Economic Surprise Index, which measures how economic data is coming in versus expectations, rebounded strongly from negative territory in September …

Economic reports released in November 2017, which mostly reflect economic activity in October, largely exceeded economists’ consensus expectations with several very strong reports pointing to potential acceleration. With the help of a bounceback in economic activity disrupted by Hurricanes Harvey and Irma, October industrial production and housing data were particularly strong. …

Economic Data Economic reports released in September 2017, which mostly reflect economic activity in August but also include some weekly data and preliminary reports for September, were already showing the impact of three powerful hurricanes that hit Texas, Florida, Louisiana, and Puerto Rico in August and September. The economic impact of these events was significant …

Economic Data Economic reports released in August 2017, which mostly reflect economic activity in July, confirmed that the U.S. economy continued to exhibit steady growth at the start of the third quarter after a solid rebound in the second quarter. The primary driver of the expansion was support for business spending which has continued to round out the solid picture of consumer spending …

Economic reports released in June 2017, which mostly reflect economic activity in May, continues to indicate that economic growth picked up during the second quarter of the year. The consensus estimate from economists surveyed by Bloomberg is calling for a gross domestic product (GDP) rate of 3% during the second quarter, on an annualized basis, slightly above the average of the New York Federal Reserve …

Economic reports released in May 2017, which mostly re ect economic activity in April, signaled that economic growth has likely picked up in the second quarter of the year. The consensus estimate by Wall Street Journal surveyed economists project growth near 3%, similar to the average of the New York Federal Reserve (Fed) and Atlanta Fed NowCast models, which forecast quarterly GDP based on currently …