7th consecutive monthly gain for the major equity benchmarks. The S&P 500 has climbed for 9 of the past 10 months and sits near its all-time high. Seems that while economic data was mixed in the month and the Delta variant continued to spread, the figures were good enough to avoid a sell-off.
With the inflation as one of the key areas of focus, further pickup in inflationary pressure could question the ECB’s monetary policy. In US, the Fed already said they expect to taper its large scale asset purchases, with probably rate increases during the next year.
The attention will be put on the early days of September in the Jackson Hole event, as main policy makers and leaders will place on the table their views on global economy and risks. For now, stocks have risen and corporate spreads have narrowed over the summer, buoyed by expectations that the economic recovery would enable corporate profits to keep expanding.
We see an imbalance between risk and multiples, so that we stick with our strategy of being invested in high quality companies more than ever.