Bull and bear in front of the Frankfurt Stock Exchange, by the sculptor Reinhard Dachlauer. Photo: Eva K.
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A winning H1 2021, but will bull market continue?

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After an impressive first half, the current bull run in stock markets is likely to continue for the second half of 2021 – but there are also headwinds on the horizon, according to the CEO of a leading advisory and fintech.

“Stocks are headed for their second-best performance since 1998 for the first half of this year,” said a bullish Nigel Green, chief executive and founder of deVere Group which has $12 bln under advisement.

“After a highly impressive run in the first half of 2021 and the second quarter, the current bull run in stock markets will continue for the second half of 2021,” said Green, as analysts watch to see if the MSCI AC World Index’s gains of around 12% hold, beaten only by a 15% rise in 2019.

“The continuing robust economic growth in major economies, strong corporate earnings, ultra-low interest rates, and a sleeping bond market, will all mean that investors looking for yield will keep piling into equities, topping up their portfolios to build wealth.

“There’s more than a hint of Goldilocks in the near-term,” added Green.

The deVere CEO warned that the upbeat sentiment gripping stock markets also needs to remain in-check as headwinds loom on the horizon.

“Investors must avoid complacency in the second half 2021. There are two key things they should watch out for.

“First, changes to policies as central banks and governments look to scale back their unprecedented support, which has helped bolster asset prices.

“Second is inflation. It remains too early to say either way whether inflation is transient or persistent. But the debate will stir-up volatility which will define the second half of 2021 in financial markets.

“Of course, if we get more sustained inflation, central banks will have to start moving sooner rather than later on interest rates.”

Green concluded that the factors that have driven the first half of the year will continue – and some may develop even further – in the second half, meaning the bullish sentiment will maintain its grip over stock markets.

“Whether the second half performs quite as brilliantly as the first is unsure, but the opportunities for strong returns for investors remain.”