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Market Update - 3rd Quarter 2021

The global equity rally staged a modest retreat for the third quarter:

•    U.S. large-cap stocks were essentially flat while small-caps suffered a decline

•    International developed markets were mixed but generally remain quite strong year-to-date

•    Emerging Market equities registered deep losses which tipped their returns into the negative for the year

Butch Filippi, CFP®

Fixed income performance was mixed as yields increased during the quarter:

•    U.S., UK and eurozone government bond rates generally increased as prices fell

•    Inflation protected securities (TIPS) were the top performing sector followed by high yield bonds

•    Emerging market debt and global sovereigns had the steepest losses


•    Investors revisited stocks that benefited the most during 2020.  These were the work-at-home, big technology companies and other large-cap growth stocks.

•    Covid-19 has impacted global supply chains as inventories remain exceedingly low relative to demand.

•    Inflation continues to exceed consensus expectations as commodity prices continue to rise

•    U.S. consumer demand remained high as household wealth is at an all-time high, owning to booming stock and housing prices

Outlook (the Good and the Bad):

•    There are concerns about the fight in Washington over the amount of infrastructure spending and corporate and individual tax rate increases.

•    Globally, the earnings of publicly traded companies generally remain robust

•    The Fed may be forced to raise interest rates higher and faster than anticipated over the next few years 

•    Continued renormalization of global economic growth as it continues to get back on track

Disclosures:  This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Information provided by SEI Investments Management Corporation, a wholly owned subsidiary of SEI Investments Company (SEI)