{"id":1384,"date":"2021-11-09T15:47:22","date_gmt":"2021-11-09T20:47:22","guid":{"rendered":"https:\/\/www.nepc.com\/private-wealth\/?p=1384"},"modified":"2021-11-09T15:47:38","modified_gmt":"2021-11-09T20:47:38","slug":"oct-2021-market-commentary","status":"publish","type":"post","link":"https:\/\/www.nepc.com\/private-wealth\/oct-2021-market-commentary\/","title":{"rendered":"NEPC’s October 2021 Market Commentary"},"content":{"rendered":"
[vc_row][vc_column][vc_column_text uncode_shortcode_id=”104011″]U.S. equities moved higher in October as strong corporate earnings and a relatively positive macroeconomic backdrop pushed the S&P 500 Index to a record high, with the index gaining 7% last month. During this period, non-U.S. equities were also in the black as a rebound in Chinese assets and dollar weakness supported returns, with the MSCI EAFE and MSCI Emerging Markets indexes returning 2.5% and 1%, respectively; notably, the MSCI China Index increased 3.2% in October as mega-cap names bounced back from last quarter\u2019s lows caused by a string of recent regulatory actions.<\/p>\n

Meanwhile, the U.S. yield curve flattened last month, with the 10-year Treasury yield rising three basis points to 1.55%, while the 30-year Treasury yield fell 15 basis points to 1.94%. As a result, long-duration assets outperformed, leading to gains of 1.9% for the Barclays Long U.S. Treasury Index.<\/p>\n

Inflation concerns weighed on fixed-income markets as upward pressure in energy prices and supply chain issues continued. The 10-year U.S. breakeven inflation rate rose 14 basis points to 2.51%. Despite the increase, market pricing still suggests a relatively muted inflation outlook over the long term.<\/p>\n

In real assets, commodity prices pushed higher as strong demand and continued supply constraints cascaded through markets. Spot WTI Crude Oil posted an 11.1% increase for the month \u2013 pushing year-to-date gains to 72.8%. Futures curves remain in backwardation\u2014when the futures price of a commodity is below the current spot price\u2014across the energy sector, underscoring market expectations that commodity prices will normalize in the near term.<\/p>\n

While the environment remains supportive for equities, credit spreads in the public-debt space imply muted forward-looking returns. As a result, we recommend reducing exposure to lower-quality credit. At the same time, we caution investors to brace for potentially higher inflation relative to market expectations and suggest adding large-cap value exposure to U.S. equity to help mitigate the impact of rising interest rates on portfolios.[\/vc_column_text][vc_single_image media=”1385″ media_width_percent=”100″ uncode_shortcode_id=”123011″][\/vc_column][\/vc_row]\n<\/div>","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_column_text uncode_shortcode_id=”104011″]U.S. equities moved higher in October as strong corporate earnings and a relatively positive macroeconomic backdrop pushed the S&P […]<\/p>\n","protected":false},"author":11,"featured_media":1385,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[12],"tags":[16,17,31,18,19,20,32,21,33,23],"class_list":["post-1384","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-corporate-defined-benefit","tag-defined-contribution","tag-discretionary-services","tag-endowments-and-foundations","tag-healthcare","tag-insurance","tag-market-commentary","tag-private-wealth","tag-public","tag-taft-hartley"],"yoast_head":"\nOctober 2021 Market Commentary<\/title>\n<meta name=\"description\" content=\"U.S. equities moved higher in October as strong corporate earnings and a relatively positive macroeconomic backdrop pushed the S&P 500...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.nepc.com\/private-wealth\/oct-2021-market-commentary\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"October 2021 Market Commentary\" \/>\n<meta property=\"og:description\" content=\"U.S. equities moved higher in October as strong corporate earnings and a relatively positive macroeconomic backdrop pushed the S&P 500...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.nepc.com\/private-wealth\/oct-2021-market-commentary\/\" \/>\n<meta property=\"og:site_name\" content=\"NEPC - 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