April turned out to be one of the worst months for investors in recent memory, if we except March 2020, when the magnitude of the Covid pandemic became clear. The S&P’s 500 went down 8.72%. The Nasdaq sunk 13.24% and the Russell 200 (Small Cap Index) lost 9.91%. The situation did not turn out much better internationally where the EPAC BM Index dropped 7.00%.
Volatility and divergence were the two themes of the month of March for investors. If US equities managed to progress overall, volatility was high and reversals numerous. Meanwhile, as US equities advanced, fixed-income markets suffered some of the largest losses ever seen in such a short amount of time. The chart below illustrates this dichotomy.
The beginning of 2022 is proving to be an anxious one for equity investors in the US and across the globe, for a variety of reasons that I will develop later in this newsletter. In February, the S&Ps’ 500 went down 2.99%. The Nasdaq Composite suffered more, with a loss of 3.35%. The Russell 2000 (small caps) did marginally better, registering a milder .72% loss.
Internationally, developed markets declined, with the S&P Epac BMI down 1.72% and emerging markets dropping more, with the MSCI Emerging Markets down 2.99%.
The year started anxiously for most investors. Inflation fears coupled with uncertainty about the pace and depth of the Federal Reserve’s monetary response pushed market volatility significantly up. Equities went down across the globe, with few exceptions other than for equity markets tied to oil. The S&Ps’ 500 went down 5.17%. The Nasdaq Composite suffered more with a loss of 8.96%, after entering correction territory earlier In the month. The Russell 2000 (small caps) registered a 9.63% loss. Internationally, developed markets declined with the S&P Epac BMI down 5.80%.
Major equity markets performed spectacularly in December. The S&P’s 500 rose 4.48% on a total return basis. Internationally, the EPAC BMI index of developed economies rose 4.78%. The MSCI EM index of emerging markets rose only 1.88%, reflecting the likely greater impact on developing economies of the Omicron variant. Domestically, the Nasdaq Composite suffered comparatively with a meager .74% gain while the Russell 2000 (small caps) did better with a 2.23% performance.
During November the S&P’s 500 went down .69% on a total return basis. The Nasdaq Composite managed a small .33% gain and the Russell 2000 (small caps) dropped 4.17%. Internationally,
the rapid rise of the USD caused the EPAC BMI index (developed economies) to slip by about 5% while the MSCI EM (emerging markets) lost 4.08%
Equity markets bounced back up with a vengeance in October. The S&Ps’ 500 was up 7.01%, the Nasdaq Composite up 7.29% and the Russell 2000 (small caps) 5.95%. Internationally, the performance of the EPAC BMI index (developed economies) paled in comparison with a mediocre 1.91%. The MSCI EM (emerging markets) was worse with a .99% monthly performance.
A confluence of factors caused equity markets to fall in September. The S&P’s 500 went down 4.65% on a total return basis. The Nasdaq Composite was down 5.27% and the Russell 2000 (small caps) 2.95%. Internationally, the EPAC BMI index slipped 3.31% while the MSCI EM (emerging markets) lost 3.95%. A rising USD did not help European equity markets. The USD was up 2% in September against the Euro and is up 5.35% so far in 2021.
August was yet another spectacular month for equities worldwide. The S&P’s 500 went up 3.04% on a total return basis. The Nasdaq Composite was up 4.08% and the Russell 2000 (small caps) 2.24%.
Internationally, the EPAC BMI index was up 1.55% while the MSCI EM (emerging markets) rose 2.62% and frontier markets registered a positive performance of 3.30%. US fixed income markets went slightly down (from -.20% to -.35%), with the exception of the high yield sector (+.51%).
In July, the performance of US equities fluctuated significantly from one sector to another. The S&P’s 500 was up 2.38% on a total return basis. The Nasdaq Composite was also up 1.19% but the Russell 2000 (small caps) was down 3.61%.
Internationally, the EPAC BMI index was up a mere .32% while the MSCI EM (emerging markets) shrunk 6.73% and frontier markets registered a positive performance of.15%.
In June, US equities continued to forge ahead, with a return ofgrowth stocks to the fore. The S&P’s 500 was up 2.33%on a total return basisbut the Nasdaq Composite was up even more with a 5.55% performancewhile the Russel2000 (small caps) wasup1.47%. Internationally, arisingUSD hurt developed market equities. The EPAC BMI index was down .97% while …
In May, US equities progressed unequally, depending on sectors. The S&P’s 500 was up .70% on a total return basis. But the Nasdaq Composite was down 1.44% while the Russel 2000 inched up a mere .21%. The rotation that has favored “value” and “traditional economy” stocks continued at the expense of the tech sector.
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