Market Commentary

October 2021Market Commentary

From Equity Research
September lived up to its reputation as a tough month for equities as markets faced a wide range of macro concerns. Congressional gridlock, ongoing COVID-19 challenges, questions about China growth, delays in global logistics networks, the outlook for interest rates, inflation rising and oil prices surging all combined to create a challenging market backdrop for September. Market volatility reflected the tough environment with the VIX index or “fear gauge” steadily rising from about 16.5 at the beginning of September to end the month above the 23 level. For the full month, the Dow Jones Industrial Average decreased 4.3%, the S&P 500® index decreased 4.8%, and the smaller cap weighted Russell 2000® decreased 3.1%.

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September 2021Market Commentary

From Equity Research
Equity markets broadly rose in August despite the ongoing spread of the COVID-19 Delta variant with the rally fueled at least in part by ongoing accommodative monetary policy. Market volatility was relatively flat for the month although the VIX index or “fear gauge” spiked mid-month as news deteriorated around Afghanistan reaching a mid-month high over 24 before settling to end the month in the mid-teens. For the full month, the Dow Jones Industrial Average increased 1.2%, the S&P 500® index increased 2.9%, and the smaller cap weighted Russell 2000® increased 2.1%

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August 2021Market Commentary

From Equity Research
The spread of the COVID-19 Delta variant weighed on markets in July with economically sensitive sectors, in particular, lagging. Despite this backdrop, the VIX index or “fear gauge” ended the month at just over 18 having reached a high near 25 mid-month amidst concerns that the surge in the virus could derail the economic recovery. For the full month, the Dow Jones Industrial Average increased 1.3%, the S&P 500® index increased 2.3%, and the smaller cap weighted Russell 2000® decreased 3.7%.

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July 2021Market Commentary

From Equity Research
Markets digested a range of conflicting signals during June with inflation in key commodities rising amidst increasing COVID concerns linked to the Delta variant. Nevertheless, market complacency appears to be holding relatively high as reflected in the VIX index or “fear gauge” which ended the month at just below 16 having reached a high near 21 mid-month. For the full month, the Dow Jones Industrial Average decreased 0.1%, the S&P 500® index increased 2.2%, and the smaller cap weighted Russell 2000® increased 1.8%.

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June 2021Market Commentary

From Equity Research
Equity markets continued to move higher in May as enthusiasm around reopening combined with widespread vaccinations appeared to overcome concerns around rising inflation. Optimism in the markets was reflected in the VIX index or “fear gauge” which ended the month at about 17 having reached a high of 28 early in the month in the midst of the uncertainty created by the Colonial Pipeline hack. For the full month, the Dow Jones Industrial Average increased 1.9%, the S&P 500® index increased 0.6%, and the smaller cap weighted Russell 2000® increased 0.1%.

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May 2021Market Commentary

From Equity Research
News of improving economic growth and surging vaccinations in the U.S. provided a constructive backdrop for equity markets in April leading to across the board gains in major indices. Although the news in the U.S. appears quite good for a summer reopening, other regions of the world continue to experience challenges with spread of the virus that represent a persistent global threat as new mutated strains emerge. For the full month, the Dow Jones Industrial Average increased 2.7%, the S&P 500® index increased 5.2%, and the smaller cap weighted Russell 2000® increased 2.1%.

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April 2021Market Commentary

From Equity Research
Signs of a robust economic recovery and accelerating vaccinations in the U.S. helped fuel broad based market gains in March. The combination of the new $1,400 stimulus checks with the announcement of a major new infrastructure proposal helped reinforce the magnitude of fiscal stimulus efforts being pursued in the U.S. Reflecting shifting sentiment, there was a noteworthy decline during March in the VIX Index or “Fear Gauge” which ended the month below 20 reflecting growing market confidence. For the full month, the Dow Jones Industrial Average increased 6.6%, the S&P 500® index increased 4.2%, and the smaller cap weighted Russell 2000® increased 0.9%.

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March 2021Market Commentary

From Equity Research
During February, equity markets responded positively to improving daily COVID-19 case count trends and the broadening distribution of vaccines amid signs of improving economic news. The VIX Index or “Fear Gauge” which had spiked at the end of January, generally trended down for the month although concerns around rising interest rates appeared to boost the index near month-end. For the full month, the Dow Jones Industrial Average increased 3.2%, the S&P 500® index increased 2.6%, and the smaller cap weighted Russell 2000® increased 6.1%.

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February 2021Market Commentary

From Equity Research
The New Year ushered in continuing uncertainties for equity markets as the COVID-19 pandemic weighs on consumers both in the U.S. and abroad. During January, equity market performance was mixed with smaller caps generally outperforming large cap stocks. Reflecting a notable shift, the VIX Index or “Fear Gauge” which had been tracking in the low 20 range spiked to over 37 near month end as investors reacted to unusual social media driven stock price behavior. For the full month, the Dow Jones Industrial Average dropped 2.0%, the S&P 500® index dropped 1.1%, and the smaller cap weighted Russell 2000® increased 5.0%.

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January 2021Market Commentary

From Equity Research
Despite the ravages caused by the global COVID-19 pandemic, 2020 will go down in history as a volatile but overall very strong year for equity investors. It was a year that saw the S&P 500® index crater by 32% in the first quarter of 2020 before rebounding sharply on the heels of unprecedented fiscal and monetary stimulus efforts. The U.S. Federal Reserve and other major central banks along with strong government stimulus efforts drove a second quarter 2020 snapback followed by solid further recovery through year-end. During December, equities added to gains for the year while the VIX Index or “fear gauge” climbed as the new year approached. For the full month, all three major equity indexes increased with the Dow Jones Industrial Average up 3.3%, the S&P 500® index up 3.7%, and the smaller cap weighted Russell 2000® increasing 8.5%.

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December 2020Market Commentary

From Equity Research
Equity markets during November generated powerful gains as investors focused on a future where highly effective vaccines might allow a return to a more normal life. This optimism came despite increasingly dire news around the rapid acceleration in the spread of the COVID-19 case counts across the U.S. in recent days. The optimistic market outlook was reflected in the VIX Index, or “fear gauge,” which started the month at about 38 and steadily declined to end the month at just over 20. For the full month, all three major equity indexes increased strongly with the Dow Jones Industrial Average up 11.8%, the S&P 500® index up 10.8%, and the smaller cap weighted Russell 2000® increasing 18.3%.

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November 2020Market Commentary

From Equity Research
Equities were broadly down in October as investors grew cautious in response to surging COVID-19 case counts and the uncertainties around the Presidential election which have continued as vote counting continues post-election. The VIX Index, or “fear gauge,” started the month in the mid-25 range and spiked at month-end to over 38. For the full month, two of the three major equity indexes declined with the Dow Jones Industrial Average down 4.6%, the S&P 500® index down 2.8%, and the smaller cap weighted Russell 2000® increasing 2.0%.

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October 2020Market Commentary

From Equity Research
Equities took a breather in September following a strong August as uncertainties around the upcoming election combined with ongoing concerns linked to the pandemic weighed on markets. The VIX Index, or “fear gauge,” was volatile through the month ending the period around where it began in the mid-25 range. For the full month, all three major equity indexes declined with the Dow Jones Industrial Average down 2.3%, the S&P 500® index down 3.9%, and the smaller cap weighted Russell 2000® down 3.5%.

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September 2020Market Commentary

From Equity Research
Equity markets surged higher during August despite the challenging backdrop created by the COVID-19 pandemic. Investors cheered on gains in a select group of leading technology companies that have been at the core of the market rebound seen this year. Concerns in August around the progress of the virus and increasing civil unrest appeared to have been largely shrugged off by investors with the VIX Index, or “fear gauge,” moving up only slightly from about 24.5 at the start of the month to end at about 25.6. For the full month, all three major equity indexes increased with the Dow Jones Industrial Average up 7.6%, the S&P 500® index up 7.0%, and the smaller cap weighted Russell 2000® up 5.5%.

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August 2020Market Commentary

From Equity Research
The rebound in U.S. equity markets continued during July despite surging levels of new COVID-19 cases emerging across the country. The market advance remained narrow, however, with a handful of leading technology companies fueling gains. Although concerns around the spread of the coronavirus represented headline news, the VIX Index, or “fear guage” suggests that investors broadly shrugged it off with the index dropping from a little over 30 at the start of the month to end at 24.5.

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July 2020Market Commentary

From Equity Research
The World Health Organization warned that “The worst is yet to come” as the spread of the coronavirus pandemic appears to be accelerating in the U.S. The potential economic ramifications of an upsurge in the virus weighed on equity markets in late June although for the full month equities advanced broadly. The VIX Index, or “fear gauge” spiked to over 40 mid-month before settling back to near 30 range at month-end. For the full month, all three major equity indexes increased with the Dow Jones Industrial Average up 1.7%, the S&P 500® index up 1.8%, and the smaller cap weighted Russell 2000® up 3.4%.

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June 2020Market Commentary

From Equity Research
Rebounding equity markets during May captured investor optimism that the worst may be behind the economy against a backdrop of continuing fiscal and monetary support from governmental policies. Market enthusiasm seemed to increase as the month progressed as pandemic lockdowns were lifted spurring equities to move into valuation bands that could be ahead of fundamentals. Investor optimism improved as seen in the VIX Index, or “fear gauge” which trended down from April levels in the mid-30’s to about 27.5 at the end of May. For the full month, all three major equity indexes increased with the Dow Jones Industrial Average up 4.3%, the S&P 500® index up 4.5%, and the smaller cap weighted Russell 2000® up 6.4%.

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May 2020Market Commentary

From Equity Research
Equity markets rallied in April on unprecedented levels of government stimulus combined with rising hopes that shelter-in-place mandates may be slowing the spread of the virus. More bullish sentiment amongst investors was reflected in the VIX Index, or “fear gauge” which backed off March highs in the 80’s to end April in the mid-30’s. For the full month, all three major equity indexes increased with the Dow Jones Industrial Average up 11.1%, the S&P 500® index up 12.7%, and the smaller cap weighted Russell 2000® up 13.7%.

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April 2020Market Commentary

From Equity Research
March was a tumultuous month for equity markets closing out the worst Q1 performance ever as the COVID-19 pandemic spread across the United States sowing fear and uncertainty. As markets searched for a bottom, investors grappled with social and economic fallout from the crisis which will reverberate for years to come. Against this backdrop, fiscal and monetary stimulus spigots were opened wide in March providing some needed support for wary investors. Fear, as measured by the VIX Index, appeared to peak mid-March as the gauge broke through the 80 mark before easing to the mid-50’s by month-end. For the full month, all three major equity indexes declined with the Dow Jones Industrial Average down 13.7%, the S&P 500® index down 12.5%, and the smaller cap weighted Russell 2000® down 21.9%.

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March 2020Market Commentary

From Equity Research
During February our disease vocabulary unfortunately expanded beyond coronavirus to the even more scary sounding COVID-19 as the epidemic moved from China to virtually all corners of the planet. With the spreading virus came concerns around health, supply chains, energy, and global GDP as both the total number of cases and deaths rapidly increased. Not surprisingly, equity markets shuddered from the onslaught with fear spiking and stock markets slumping. The VIX Index or ‘fear gauge’ which started the month at about 18 reached levels not seen since the financial crisis hitting 40 by the end of February. For the full month of February, all three major equity indexes declined with the Dow Jones Industrial Average down 10.07%, the S&P 500® index down 8.41%, and the smaller cap weighted Russell 2000® down 8.53%.

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February 2020Market Commentary

From Equity Research
Following an impressive 2019, equity investors were greeted with a range of challenges to kick off the New Year ranging from geopolitics to health concerns. The U.S. air strike in early January targeting an Iranian official added to turbulence in energy markets that had been striving to reach a better supply/demand balance. These concerns were overshadowed later in the month with the emergence of the coronavirus outbreak spreading through China and beyond. Adding in to the mix the ongoing political uncertainty from the impeachment trial and it is not surprising that the VIX volatility index or “fear gauge” spiked from about 12-13 in early January to reach multi-month highs in the 18 range by month-end. For the full month of January, all three major equity indexes declined with the Dow Jones Industrial Average down 0.99%, the S&P 500 index down 0.16%, and the smaller cap weighted Russell 2000 down 3.26%.

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January 2020Market Commentary

From Equity Research
The 2019 bull market rally was sustained in December with equity indexes closing out the year in solidly positive territory albeit giving back some gains at the start of the New Year following the airstrike in Iran. For the full year, 2019 proved to be outstanding for equity investors with the S&P 500® closing out with a performance among the best in the past 50 years. The solid gains in the market were far from expected a year ago after the sharp market pullback in December 2018 following Fed rate hikes. Sentiment started to shift in January 2019, as Fed Chair Powell announced the Fed would ‘pause’ on its interest rate hiking strategy that was subsequently followed by three, 25 basis point, rate cuts as 2019 progressed with the Fed shifting to an easing stance. Lower rates drove a marked expansion of P/E ratios with the forward market multiple expanding from ~15.5x to the current ~18.6x during the year. During December of 2019, the VIX Index or “fear gauge” was relatively stable generally tracking around the 13 level before inching into the 15 range near month end. For the full month of December, all three major equity indexes rose sharply with the Dow Jones Industrial Average up 1.7%, the S&P 500 index up 2.9%, and the smaller cap weighted Russell 2000® up 2.7%.

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