Market Review - November 2021
Source: FactSet financial data and analytics
The equity markets declined in November over concerns of the new Covid-19 variant, Omicron. US equities, though negative, outperformed both developed international (-4.6%) and emerging markets (-4.1%). Developed international equity markets were hardest hit due to a stronger dollar and renewed restrictions in Eurozone.
Within US sectors, Technology was the best performing sector over the month, rising 4.3%. Consumer Discretionary also rose by 2.0% due to strong October US retails sales¹. Financials and Communication Services were hit the hardest in October, returning -5.7% and -5.2% respectively. Financials, namely bank stocks which benefit from higher interest rates, were hurt as Treasury yields fell in November².
The US bond market eked out positive gains of 0.3% in November. Long Treasuries and Treasury Inflation Protected Securities (TIPS) were the top contributors during the month returning 2.7% and 0.9% as investors flocked to safety and US inflation as measured by Consumer Price Index (CPI) jumped to 6.2%³ year over year, its highest reading in 31 years. Higher risk bonds like US High Yield and emerging market bonds were down for the month.
The commodity index declined by 7.3% during the month led by sharp fall in energy prices (-17.1%). Despite higher inflation fears, gold reversed course and fell -0.5% as the US Dollar rose by 1.8% in November. US REITs returned -1.0% for the month, with hotels (-8.7%) being the largest detractor.
Relative to a globally balanced (60/40) equity/bond index, allocations to global bonds, US REITs and gold helped while global equities and commodities hurt for the month.
Source: FactSet financial data and analytics
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