- A major reversal in the U.S. markets occurred in November, thanks to promising developments on COVID-19 vaccines along with a putatively benign outcome of the Presidential and Congressional elections. The S&P 500® gained 11%, its best performance since April, while smaller caps outperformed, with the S&P MidCap 400® and the S&P SmallCap 600® rising 14% and 18%, respectively. Volatility declined, as VIX® closed the month at 20.57.
- All factor indices gained, as High Beta and Enhanced Value strategies topped the factor league table. Consistent with the reversal theme, Equal Weight outperformed, while Value outperformed Growth.
- Not surprisingly, sector dispersion widened in November, as history shows that sectors tend to be especially important during the Novembers when Presidential elections take place. Energy, up a remarkable 28%, was the month’s top performing sector after years of underperformance.
This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.
The report also illustrates the impact of globally diversified portfolios and features a quarterly topic.
Click HERE to download this quarter’s breakdown!
It’s natural for investors to seek a connection between who wins the White House and which way stocks will go. But a look at history underscores that shareholders are investing in companies, not a political party.What History Tells Us About US Presidential Elections and the Market
- In spite of weak macroeconomic data and fears of a resurgence of COVID-19, U.S. equities continued their rally in July, aided by Fed stimulus and strong earnings results The S&P 500® gained by 6%, while the S&P MidCap 400® and the S&P SmallCap 600® gained by 5% and 4%, respectively. The total return for the S&P 500 is now modestly positive year to date. Volatility declined, with the VIX® closing the month at 24.46.
- International markets also gained, with especially strong performance in the emerging markets. The S&P Developed Ex-U.S. BMI and S&P Emerging BMI were up 3% and 8%, respectively.
- With the exception of Enhanced Value, all factor indices posted gains, with Momentum and Low Volatility in the lead. Consumer Discretionary and Utilities were the top performing sectors.
- After March’s carnage, U.S. equities roared back in April, driven by fiscal stimulus and the apparent slowing of the spread of COVID-19. The S&P 500® gained by 13%, the best monthly performance since January 1987. In a reversal from the recent past, mid-caps performed even better, with the S&P MidCap 400® up 14%. While still relatively high, volatility calmed, with the VIX® closing the month at 34.15.
- International markets also recovered, with the S&P Developed Ex-U.S. BMI and S&P Emerging BMI up 8% and 10%, respectively.
- All factors and sectors posted gains, with High Beta and Growth in the lead, followed by Equal Weight, thanks to the recovery of smaller-caps. After suffering this year and in spite of the volatility of oil prices, Energy made a comeback as the top performing sector.
|We will continue to monitor the situation and make any recommendations that we deem appropriate, but given that your goals and time horizons haven’t changed, we believe the current strategy remains the best course of action.