Canterbury Insights


  Back to Canterbury Insights
Asset Class Reports
Canterbury Review: Second Quarter 2021

Global Reopening

  • U.S. stock markets delivered positive returns in the quarter, supported by the rebound of growth stocks, strong first quarter earnings, and the prospect of a bipartisan deal to increase infrastructure spending.

  • European equities outperformed emerging markets (EM) equities in the quarter. Europe benefitted from the reopening of regional economies and strong global goods demand. In contrast, the slow vaccination campaign in Japan and policy tightening in China weighed on their relative performance.

  • U.S. core bonds ended the second quarter with positive returns as economic activity increased and fundamentals continued to improve. The Fed moved up its timeline in raising interest rates and discussed slowing down its asset purchase program at the latest FOMC meeting. The treasury yield curve slightly flattened as the bond market disregarded inflation concerns.

  • Investment grade (IG) and high yield (HY) spreads grinded tighter over the quarter. Corporate credit spreads have continued to narrow since the peak in March 2020 and are now at historic tights.

  • Commodities and energy-related-assets continued to benefit from renewed demand from an economic reopening and higher inflation expectations.

  • Inflation, measured by CPI, drastically increased over the quarter from 1.7% at the end of Q1 to 5.0% at the end of Q2. Inflation breakeven rates marginally decreased over the quarter but still remained above 2%. ISM manufacturing and non-manufacturing indicators remained above historic levels over the quarter as companies continued to rebuild inventories.


To view the second quarter reports, click on the links below: