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Monthly Market Wrap: June 2021

Welcome back to the Monthly Market Wrap from YCharts, where we break down the most important market trends for advisors and their clients every month. As always, feel free to download and share any visuals with clients and colleagues, or on social media.

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As Bon Jovi would say, “woah, we’re halfway there”—and as 2021 is halfway over, it appears markets have not been livin’ on a prayer this year. It’s been quite a positive year for equity indices both here in the U.S. and abroad, with the S&P 500 rising 15.3% and the NASDAQ up 13%, while International Developed Markets added 9.2%:

S&P 500, NASDAQ 2021 YTD Returns (January to June 2021)

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As for individual sectors, all 11 SPDR Sector ETFs are higher in the first six months of 2021. Energy is by far and away the leader, up 45.1%, while Utilities is the laggard, though still up 2.4%:

SPDR 2021 YTD Sector Returns (January to June 2021)

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Before cruising on to the second half of the year, we’ll take a quick pit stop to look at these key developments in June:

Off the YCharts! Flights to Safety

Major Index Returns: NASDAQ Runs Away in Late June

Sector Movement: 6 out of 11 Winners in June

Hot Stocks of the Month: Biogen Soars, Semis Charge Up

Laggards & Losers: Airlines Get Grounded

Economic Data: House Prices are Through the Roof


Off the YCharts! Flights to Safety

Though Gold is typically a safe haven in times of rising inflation, the price of gold in US Dollars is down 13.6% since its August 2020 peak. As the US inflation rate reaches historic highs along with US public debt and other national economic figures, investors have shielded themselves by flocking into foreign currencies, notably the Euro and Canadian Dollar. Anyone out there trading singles for Loonies?

US Inflation Rate, Gold Price in US Dollars, Euro to US Dollar Exchange Rate, and Canadian Dollar to US Exchange Rate from June 2017 through June 2021

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Major Index Returns: NASDAQ Runs Away in Late June

Major Index Returns for June 2021

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It was a runaway June for the tech-heavy NASDAQ, which roared back from a -1.4% May to finish up 5.6% this month thanks to massive rebounds in technology names. The S&P 500 also finished June in the green, up 2.3%, and Emerging Markets tacked on 1.4%. June was not as rosy for International Developed Markets, which fell 1.4%. Finally, high yield corporate bonds added 1.3% while the Global Aggregate Bond Index slipped 0.7%.


Sector Movement: 6 out of 11 Winners in June

SPDR ETF Sector Movement, June 2021

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June delivered mixed sector results, as six of the 11 posted positive gains during the month. After slipping 0.9% last month, Technology led the way with a 6.9% surge in June. Energy followed with a 4.2% increase after leading all sectors in May. Consumer Staples had a muted month, down 0.6%, but the big decliner was Materials, finishing 5.3% in the red mainly due to sinking prices of gold and other precious metals. (Gold fell 6% in June, and only 13 of the 90 gold stocks with a $1B market cap or greater finished the month positive.) June’s losers also included Utilities, Industrials, and Financials, down 2.2%, 2.3%, and 3.1%, respectively.


Hot Stocks of the Month: Biogen Soars, Semis Charge Up

Top ten performing S&P 500 stocks for May 2021

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Biogen (BIIB) was June’s top stock, surging nealy 30% thanks to FDA approval of its drug Aduhelm, the first and only Alzheimer’s treatment that also addresses a defining pathology of the disease. Semiconductor stocks were higher as well, as shares of NVIDIA (NVDA) rose 23.1% on a continued streak of analyst upgrades and price target increases, and Advanced Micro Devices (AMD) advanced 17.3% as Google announced it will use the company’s EPYC chips in its Tau VM computer engines.

Enphase Energy (ENPH), Generac Holdings (GNRC), NRG Energy (NRG), Etsy (ETSY), Occidental Petroleum (OXY), ResMed (RMD), and Twitter (TWTR), also made the cut for May’s hot stocks.


Laggards & Losers: Airlines Get Grounded

Worst performing S&P 500 stocks, April 2021

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Southwest Airlines (LUV), Alaska Air Group (ALK) and American Airlines Group (AAL) all lost more than 12% in June, as the air carriers continue to see depressed demand for business travel. Southwest and American encountered specific operation problems in June as well—technical outages forced Southwest’s operation to shut down for the better part of two days, whereas American experienced a rebound in leisure travel that was so big the airline actually cut 1% of its July flights due to labor shortages. Outside of airlines, shares of gold miner Newmont (NEM) fell 13.7% on the back of tumbling gold prices in June. 

Organon & Co (OGN), Regions Financial (RF), Freeport-McMoRan (FCX), Snap-on (SNA), Willis Towers Watson PLC (WLTW), and The Mosaic Co (MOS) round out June’s ten worst performers.


Financial Market & Advisor News

Record-High Number of S&P 500 Companies Issuing Positive EPS and Sales Guidance for Q2 (FactSet)

5 Ways to Protect Your Portfolio Against Inflation (YCharts)

ESG funds in Europe hit record $1.4 trillion in 2020 (InvestmentNews)

BlackRock Warns U.S. Stocks at Risk From Higher Tax, Peak Growth (WealthManagement.com)

Today’s Wholesaler — An Asset, Guide & Consultant to Advisors (YCharts)

Why the Bond Market is Ignoring Inflation (FA-Mag)


Economic Data: House Prices are Through the Roof

Employment

May’s unemployment rate clocked in at 5.8%, falling 0.3 points from April. And if you bet that Initial jobless claims would fall to yet another record low for the post-pandemic era, you can cash that ticket! Weekly unemployment claims dropped to 364,000 as of June 26th, down 42,000 from a month ago.

Production and Sales

US Retail and Food Services Sales slipped 1.4% in May, though durable goods orders grew 2.3% in May, breaking a streak of three straight down months.

Housing

US New Single Family Houses Sold plummeted by 5.9% in May, the same level it dropped in April. Existing Home Months’ Supply rose for the fifth straight month, up 10 basis points to 2.5. A hot housing market sent the US house price index up 1.8% in April, its largest monthly gain on record.

US House Price Index from February 1991 through April 2021

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Consumers

Prices and spending saw another month of consistent growth. The US Consumer Price Index rose 0.6% in May, while consumer spending (PCE) was up by 0.4%.

 

Have a great July! 📈

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