Quarterly market outlook - 3rd Quarter 2021

Our investment strategists provide the Edward Jones perspective on the latest economic activity and what it may mean for investors.

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The Quarterly Market Outlook offers our perspective on recent activity in the capital markets. The Edward Jones Investment Policy Committee offers its viewpoints on the U.S. economy, equities, the bond market, international markets and asset classes, as well as a special topic of interest to investors each quarter.

These aren’t short-term predictions. Rather, this is Edward Jones’ perspective on market and economic topics designed to help you make decisions affecting your long-term financial strategy. As you read through each topic, you'll find specific actions you can discuss with your  financial advisor.

2nd quarter in review

Equities continued their climb in Q2; however, the gains were not without volatility. Bonds saw small gains as well. We expect the bull market to continue, albeit at a slower pace and with periods of increased volatility.

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Economic outlook

Extraordinary policy support has helped speed the recovery, with GDP reclaiming its pre-pandemic level earlier than expected. But we believe there is still plenty of room for the economy to continue to expand.

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Equity outlook

We think the bull market will slow to a trot through the remainder of the year. Strong GDP and corporate earnings growth will be a tailwind for equities, but inflation fears and the Fed’s pivot toward slightly less aggressive policy stimulus raise the potential for a stumble.

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Fixed-income outlook

We think the path of least resistance for longer-term interest rates is moderately higher. With an expected increase in market volatility, fixed-income allocations should show their mettle within portfolios.

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International outlook

We think the global picture will brighten later this year as overseas markets play catch-up with the U.S. economy. Ongoing central bank stimulus and a pause in the U.S. dollar’s ascent also should help international investment returns.

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A road map for shifting policy

Central bank policy will be front and center in the second half of the year. We think policymakers will take a cautious approach, but a shift in policy can still trigger short-term volatility. The pace of normalization will likely be a key variable in the longevity of this cycle.

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Asset allocation guidance

Get our latest guidance for a strategic asset allocation (10- to 30-year period) and an opportunistic asset allocation (one to three years).

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Quarterly market outlook - full report from Edward Jones

Download the entire Quarterly Market Outlook here.

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