August 2021

• Global markets continued advancing in August as strong corporate earnings, accommodative monetary policies and resilient economic activity supported investor confidence.
• U.S. and European equities reached fresh record highs despite concerns surrounding the Delta coronavirus variant.
• Central banks signalled that stimulus reduction discussions were beginning, though policy conditions remained highly supportive overall.
• Technology and healthcare sectors remained strong performers globally.
• Emerging markets remained under pressure due to regulatory developments in China and uneven vaccination progress.
• Commodity prices delivered mixed performance amid concerns regarding slowing Chinese growth.

Asia (ex. Japan)

Asian markets outside Japan delivered mixed results during August as strong export demand and manufacturing activity were offset by ongoing regulatory uncertainty in China and renewed coronavirus restrictions across parts of the region.

Chinese authorities continued tightening oversight of technology, education and property sectors, leading to increased volatility in domestic equities. However, semiconductor demand remained highly supportive for Taiwan and South Korea.

Europe

European equities advanced during August as strong earnings growth, accommodative European Central Bank policies and continued reopening activity supported investor sentiment.

Travel, luxury goods and industrial sectors benefited from improving consumer confidence and economic recovery, while rising Delta variant cases created only limited disruption to broader market optimism.

United States

U.S. equities reached further record highs during August as investors responded positively to strong earnings growth and continued Federal Reserve support. Technology and healthcare sectors remained key drivers of performance.

Federal Reserve officials began discussing potential tapering of asset purchases later in the year, though policymakers stressed that interest rates would likely remain low for an extended period.

United Kingdom

UK equities advanced modestly during August as economic activity remained resilient despite rising Delta variant cases. Consumer spending and service sector activity continued recovering steadily.

Investors increasingly focused on inflation pressures and labour market conditions as government support programmes approached scheduled expiration dates.

Japan

Japanese equities delivered relatively subdued performance during August as rising domestic coronavirus cases and political uncertainty weighed on sentiment.

However, exporters remained supported by strong global demand and accommodative monetary policy conditions maintained by the Bank of Japan.

Emerging Markets

Emerging markets experienced mixed performance during August as regulatory developments in China, uneven vaccine distribution and concerns regarding slowing Chinese growth created headwinds for investor sentiment.

Commodity-exporting economies remained supported by elevated energy and metals prices, though capital flows weakened slightly amid expectations for future Federal Reserve tapering.

Commodities

Commodity prices delivered mixed results during August as investors balanced strong global demand against concerns regarding slowing Chinese growth and potential future policy tightening.

Oil prices experienced increased volatility due to Delta variant concerns and supply adjustments, while industrial metals weakened somewhat following earlier strong rallies. Gold prices remained relatively stable amid balanced inflation and interest rate expectations.