Quarterly Commentary is a quarterly view of the equities, fixed income and hedge fund markets from our Family Management specialists.
The first quarter of 2021 was full of headlines within the stock market. From Gamestop in January to the crumbling of $25bil Archegos in March, explosive events abounded. That being said, the most important narratives began in early January when Democratic candidates won both seats up for grabs in the runoff elections for the US Senate in Georgia to swing the balance of power in Congress. From that date forward, financial markets shifted to reflect a growing importance of fiscal stimulus. While monetary stimulus dominated the 2010s, the fiscal element lacked.
Despite the uncertainty of the US Presidential election, risk assets rallied sharply during the fourth quarter of 2020. Across domestic indices, the S&P 500, Dow Jones Industrial, and Nasdaq Composite rose 12%, 10.7%, and 15.7% respectively in the quarter. International and emerging markets performed even better with the MSCI world and MSCI emerging markets indices rising 14% and 19.6% respectively.
Stocks broadly advanced in the third quarter of 2020. The S&P 500, Dow Jones Industrial, and Nasdaq Composite gained 8.9%, 8.2% and 11.2% respectively during the period ending September 30th. Global markets advanced as well with the MSCI Emerging Market Index rising 9.6% and the MSCI World advancing 8.1%.
The second quarter of 2020 produced historic gains for the broad stock indices. The Dow Jones Industrial Index rose 18.5% during the quarter, the largest quarterly gain since 1987 while the Nasdaq rose 30.9% for its largest quarterly advance since 1999. S&P 500 closed the quarter up 20.5% for its best quarter since 1998.