With the month of June, the first half of 2021 was close. In this second quarter, equities experienced a good time and this was mainly due to the fact that vaccination campaigns continued to accelerate in most developed economies, especially in Europe which is catching up with the UK and US. This has led governments to loosen restrictions to Covid 19 and as a result, activity levels have increased. As a result, economic data over the past 3 months has generally been very good, especially in the US where there was an annualized growth rate of 6.4% in the first quarter. Thanks to the reduction in the number of infections, the increase in vaccinations and the gradual reduction in restrictions, consumer confidence in the Eurozone also showed further improvement in June. This is the fifth month of consecutive improvements. Macroeconomic data therefore confirm a good overall economic recovery and the economic outlook for the rest of the year is solid. However, the reopening of the economies and the rapid rebound in activity that followed has fueled fears of a rise in inflation in some countries. In the United States, the FED remains patient and confirms the current interest rates, reiterating that it is ready to adjust its policy if inflation turns out to be more persistent than their forecasts. For the month of June the yield on the 10-year US treasury remained almost unchanged at 1.50%, down on the peak of 1.74% reached at the end of March.
Emerging economies indices remain slower in the quarter, lagging behind in vaccinations and with an increasing number of Coronavirus infectioons (see India).
At regional level, the month of June was positive for the United States, where the S&P 500 index recorded a performance of 2.25% and the Nasdaq +5.6%, which benefited from the rebound of growth stocks. President Biden announced that he had reached a bipartisan agreement on a new 1.2 trillion dollar infrastructure plan, which provides for the construction of infrastructure in the strictest sense, such as roads, bridges and other infrastructure projects, in order to boost the US economy and competitiveness.
In Europe the Euro Stoxx 50 index, after having reached the peak of the year towards the middle of the month, closed at 4,064, with a slightly negative performance over the month (down 0.18%). Same trend for the main peripheral indices.
The Swiss stock exchange SMI records an all-time high exceeding 12’000 during the month of June, recording a monthly performance of 4.40%. Since the beginning of the year, only Credit Suisse shares are below the closing price of 2020 due to the loss suffered by the bank following the bankruptcy of the Archegos fund.
Badly the Asian side, with Japanese Nikkei index recording a loss of 0.1% on the month, worse Hong Kong -2.15% and China with CSI 300 index -2.20%. The slowness of the vaccination campaign weighed on the performance of the Japanese market for the last quarter (ca. -3%) as well as the tightening of pandemic management policies and regulatory concerns weighed on the performance of the various Asian indices.
Oil prices continues to rise, which does not seem to want to slow down its run. In the month of June, the price of crude oil increased significantly closing at 75.13. This positive trend is favored by the tensions between Saudi Arabia and Russia. Saudi Arabia is the only country that wants to extend the increase in production until the end of 2022 while the other Opec+ countries want a resumption of production only in the short term.