Monthly financial markets outlook | August 2021

All major global asset classes ended in the green in July, but the headline numbers do not tell the full story about the market dynamics that led to that outcome. The performance of global equities was very narrow reminiscent of 2020. The S&P 500 which houses the US’s largest companies touched a new all-time high in July supported by above-average earnings deliveries by most of its constituents. European equities were up 1.8% on the back of the reopening momentum as most governments in the bloc ease lockdown restrictions. The fixed income segment was driven by inflation linkers and investment-grade bonds. Global inflation-linked bonds jumped 4%, followed by global investment-grade bonds and US high yields which delivered 1.3% and 0.4% for the month.