Market Update - February 2021

FROM THE GLOBAL ASSET ALLOCATION TEAM 
- By Candice Bangsund, Vice President and Portfolio Manager, Global Asset Allocation

After a solid start to the new year, sentiment deteriorated and the global equity market rally stalled-out even as the ramped-up global vaccination campaign and the prospect for increased U.S. fiscal spending emboldened calls for a rapid recovery. Even a dovish-leaning bias from the Federal Reserve wasn’t enough to halt the pullback after Chair Powell vowed to keep the monetary taps wide open for an extended time. Instead, investors took some pause to navigate the tug-of-war between economic recovery optimism and the immediate challenges and uncertainties posed by the pandemic. Meanwhile, an explosion of speculative retail trading activity in the small cap space sparked some volatility in late-January, with the retail-driven short-squeeze roiling the hedge fund industry and forcing some deleveraging at month-end.