Sit Investment Associates provides quality investment management expertise in domestic and international growth equities and fixed income. Investment management services are offered across four channels: Separate Accounts, Private Investment Funds, Collective Investment Funds, and Mutual Funds. We take pride in serving as a true extension of our clients’ operations, providing highly individualized service in an increasingly challenging economic and financial environment.

We view investing as the practice of applying a consistent philosophy and decision-making process over meaningful time periods. In fact, the firm’s success is built on long-term client relationships, which in turn are built on a foundation of trust, commitment, understanding, and expertise.

The firm is owned by its seasoned investment professionals, who work hands-on in every aspect of the investment process and client service. We are 100 percent committed to achieving clients’ investment objectives, because our clients’ success results in our success.

Market Commentary

October 8, 2021

With financial markets awash in liquidity, equity investors shrugged off gathering macro risks during the first two months of the third quarter, with the S&P 500 Index gaining +5.5 percent from June 30 to August 31. However, in September, the number of risks such as the Covid-19 resurgence, rising costs, persistent supply chain issues, slowing economic growth, the federal budget/debt ceiling standoff, China property woes, prospective Fed tapering, negative earnings pre-announcements, spiking energy prices, and rising bond yields became too many to ignore. Consequently, the S&P 500 pulled back -4.7 percent for its worst monthly performance since March 2020.

Bottom-up earnings for the S&P 500 are projected to grow +28 percent year over year in the third quarter and +22 percent in the fourth quarter, bringing full-year 2021 growth to +45 percent. Corporate earnings growth will continue to slow into 2022 as year-over-year comparisons become more challenging. Consensus bottom-up estimates currently suggest +9 percent earnings growth for the S&P 500 in 2022 but do not yet include the potential drag from higher corporate taxes or the distinct possibility of sustained supply/labor shortages and lower margins.

We continue to believe that market volatility will remain elevated against a backdrop of highly unpredictable and interrelated variables, including the path of Covid-19, multiple fiscal policy issues (including corporate tax increases), monetary policy, and growth challenges in China. Sector leadership will remain highly dependent on these variables, and we remain watchful for opportunities to make larger “bets” as more clarity emerges over the next several months. In the meantime, portfolios remain highly diversified with an emphasis on quality, growth, and valuation.

For our latest full Global Investment Outlook & Strategy Update, download the .pdf document.