Nordic management boutique Evli is positive about equity evolution in the coming months

by | 13 Aug 2021

Sunshine on the market

The summer months pampered both the equity and fixed-income markets. In the USA, the S&P 500 Index kept climbing, reaching new peaks one after the other and rising by over 5 percent during June and July. The European Stoxx Index also reached an all-time high, although its change in the summer months was only 3.5 percent.

The Finnish and Nordic equity markets rallied eight and seven percent, respectively. Long-term interest rates fell by around 0.3 percentage points in both the USA and the euro zone. A good two-thirds of the interest rate rise that was seen in the first half of the year has now been reclaimed.

Asian equities, however, backpedaled. In China, the equity markets were hit by private education companies having fallen under scrutiny by the authorities, whose measures are a continuation to the tightening of regulation and control seen during the year in financing, online transactions, mobile applications, and the real estate sector.

The fear on the Chinese market is that the authorities will turn their attention to the health care and gaming sectors next. The decline in the Chinese equity market also depressed other Asian markets and the emerging markets’ index as a whole. In Japan, on the other hand, the equity markets were treading water.

Confidence on the market

Market sentiment regarding current risks was confident. The spread of the Delta variant of the coronavirus does not appear to be increasing hospitalization or deaths thanks to vaccination rates approaching a level sufficient for herd immunity in Western countries. As restrictions on movement are gradually lifted, it is believed that life will return to normal.

The continuing rise of inflation did not disturb the markets, either. In the USA, inflation continued to rise in June and reached 5.4 percent. The annual US inflation rate has now remained at above 4 percent for three months. At its July meeting, however, the Fed confined itself to maintaining its current policy because the country’s economy had not yet strengthened enough. In fact, the decline in long interest rates and the levelling of the yield curve on the fixed-income market may well reflect market confidence that inflation will level off. The European Central Bank also maintained its existing policy and did not make any changes.

Companies report top results

By the end of July, about half of the S&P 500 index companies had reported their results, and nine out of ten exceeded analysts’ estimates. The average earnings growth in the second quarter was 85 percent and net sales increase 21 percent. Revenues and profits of FAANG and tech companies were particularly strong, with the exception of Netflix. The performance of growth company stock was relatively strong during the summer, but since the earnings reports, the trend has slowed down slightly.

In Europe, companies also reported strong and better-than-expected earnings and revenue growth. In the second quarter, earnings increased by 120 percent on average and revenues by 20 percent. As expectations regarding profit performance for the rest of the year and for 2022 have been adjusted upwards, market valuation levels are now moderate and validate the rising share prices.

Comparte en redes sociales

Do you want more information about this manager?

Contact us through the contact form on our website or by phone (+34 91 556 00 56). We will attend to your request and get in touch with you as soon as possible.

Evli again the best and most used institutional asset manager in Finland

Evli was once again ranked as “the Best Institutional Asset Manager” among 11 asset management companies, in the recent Kantar Prospera "External Asset Management Finland 2023" -survey. In addition to this, Evli was placed first overall in sustainable investments...

 Seema Shah, Chief Strategist at Principal Global Investors, commenting on emerging markets

"Several emerging market countries have recently accelerated their pace of vaccination and are now on track to reach critical vaccination levels in late 2021. After lagging much of the global recovery, these countries are poised for a reawakening in activity,...

OFI AM is accredited an SRI label for its Short-Term Credit fund

OFI AM has just been awarded a new ISR (SRI) labels, raising its number of SRI-certified funds to 20, covering the money-market, government and corporate bond, equity, diversified and convertible bond asset classes.   [pdf-embedder...

Regístrate para tener acceso

Para poder acceder a todos nuestros contenidos resulta necesario identificarse como contraparte elegible según los criterios de la Comisión Nacional del Mercado de Valores (CNMV) de España.


Somos una agencia de valores referente en la comercialización de fondos de terceros en España. Regístrate en nuestra página web y disfruta de todos nuestros contenidos. Si necesitas cualquier información adicional, por favor, contacta con nosotros por cualquiera de los medios disponibles.

C/ Sil 50, 28002, Madrid, España
+34 915 560 056