Market Overview


  • This quarter was once again a positive one for equities, with the S&P 500 returning 8.55%, bringing the year-to-date return to 15.24%;

  • During the second quarter bonds reacted differently than they did in the first three months of the year, returning 1.83%;

  • This shift in performance was driven largely at the very end of the quarter, as the Federal Reserve communicated that they would be less tolerant of above target inflation, causing long-term yields to fall;

  • With crude oil surging nearly 25% during the quarter, and U.S housing prices soaring, energy and real estate were two of the best performing sectors along with technology stocks;

  • Growth led value stocks in the second quarter for the first time since the third quarter of 2020, much of which came during the month of June;


  • We continue to believe that equities will outperform fixed income during the third quarter, maintaining our slight overweight in balanced portfolios;

  • Considering the lag in their response to Covid-19, developed market international equities may be an area where increase exposure during the quarter, the MSCI EAFE Index has lagged the S&P 500 by over 6% year-to-date;

  • We have since taken advantage of this decrease in rates, by further shortening the portfolio's duration, as our analysis suggests that the rally in bonds has overextended itself;

  • At this time our fixed income portfolios remain overweight corporate bonds, despite tight spreads to U.S. Treasuries, credit is still more attractive than agency mortgage-backed securities; 

Significant Cash on Sideline

Significant Cash on Sideline 


Negative Correlation Between Stocks and Bonds

Negative Correlation Between Stock and Bonds 


Hawkish Shift in Fed's Language

Hawkish Shift in Fed’s Language 



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