Anna Rathbun, Chief Investment Officer

The month of June saw American businesses on the path of resuming normal activities. With many states lifting mask guidelines and relaxing social distancing measures, Americans began the long-awaited spending in the services sectors. But the road to recovery would not be as easy as simply reopening the doors to our businesses. The labor market has seen two months of misses on job creation and the initial claims has been plateauing since late May. The manufacturing sector continues to see long supply delivery times through delayed logistics and short supplies. With persistent friction in the economy, the reflation trade in the public markets took a slight pause in a moment of reassessment.


  • The S&P 500 Index hit multiple record highs near the end of the month as tech-oriented stocks marched higher. 
  • The expected earnings growth rate for companies in the S&P 500 Index has been revised upward consistently since March 31st, and we believe that higher expectations have been priced into the markets. 
  • Advances in the European vaccination effort translated to recovery and confidence, while developing countries continued to face difficulty obtaining the vaccines. 
  • Improving conditions in German and French manufacturing helped while the services sector and consumer confidence advanced. 
  • The MSCI EAFE Index reflected the progress, returning 1.4% on local currency terms. The MSCI EM Index underperformed the MSCI EAFE, but the currency had less impact for the emerging markets. 
  • The Bloomberg Barclays Investment Grade Corporate Index came out at the top benefiting from its long duration profile, and right behind it, spread compression aided in the High Yield Index’s performance.
  • The big event that moved the markets was the Fed’s press release after its two-day policy meeting mid-month, during which the forecasted Fed Funds rate by the end of 2023 was moved up significantly to 0.6%.

Looking Ahead

The pitch of the inflation discussion came down through themonth, but prices of select materials remain elevated and are fractionallyshowing up in consumer purchases. Supply chains remain challenged, and smallbusinesses are desperate to hire workers. And globally, vaccine distribution isstill a challenge in various parts of the world. These are pandemic-relatedwoes. Unrelated to the pandemic, the infrastructure bill looms large in theU.S. as a potential cause of angst for the markets. While there seems to be abipartisan surface-level deal on the spending side, the funding side is atougher discussion because it involves taxing at some level. We expect to seeheated discussions unfold during the summer months as the world continues itsattempt to resynchronize the global economy.

More Information

For more information on the June financial market activity, please contact CBIZ Investment Advisory Services.

The information included in this update is provided for informational purposes only and should not be construed as investment advice. The views expressed are those of the author based on the data available when this update was written and are subject to change based on market conditions or other factors. CBIZ Investment Advisory Services and/or CBIZ Retirement Plan Services disclaims any liability for any direct or incidental loss incurred by applying information supplied in this update.

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Published on July 01, 2021