June 2021: no summer slump on stock markets (yet)

After an interruption in May, financial markets resumed their upward trend in June. US equities took the lead, but all other asset classes also enjoyed positive yields.

US equity market indices reached new highs in June...

... with the MSCI North America index delivering a monthly yield of over 5%. From the point of view of European investors, the US equity market was supported in that by the 2.5% appreciation of the US dollar. European and Asian equity markets also performed well, but could not keep up with the price increases in the US, with yields of +1.7% for the MSCI Europe index and +2.2% for the MSCI Asia Pacific index, respectively. Emerging markets lagged slightly behind developed market equities, with yields in June of +2.7% for the MSCI Emerging Markets index and +4.0% for the MSCI SCI World Developed Markets index.

US equities also performed better than average in the second quarter (and first six months) of 2021 as a whole, whereas Asian and emerging market equities lagged behind the global market average.

Price swings in the other asset classes were relatively limited. After a strong two-month price rally, European listed property recorded a yield of ‘only’ +1.2% in June. In fixed income securities, yields on the various subcategories (government bonds and investment grade and high yield corporate bonds) moved very close together, with monthly yields of around 0.5%. While recovering slightly from earlier price falls, European government bonds nevertheless ended the first six months of 2021 in the red at -3%. This can be considered quite remarkable for government bonds, especially after the years-long – even decades-long – period of largely lower yield levels and, consequently, positive price movements.