Happy New Year and Welcome to our first Market Update of 2024!
How were your holidays? Hopefully an exuberant stock market and nicely higher rates on savings added to the holiday splendor! U.S. stocks enjoyed a great year, rising 26.29%.1 Bonds netted a posted 5-1/2% return for the year while International and Emerging Market stocks split the difference with 11-1/2% AND 10.25% respectively.2
All in all, I feel 2023 ended on a good note. So what should we expect in this new year? I believe 2 major themes may drive headlines and possibly even the action behind stocks and bonds.
The first is how the Federal Reserve handles interest rates. Do they cut as much as they preached during November and December? I believe the stock market may have been quite optimistic at rates coming down in this new year based on what Federal Reserve Chairman Powell said.3
Years ago, I heard an old stock market adage that has stuck in my head: Don’t fight the Fed. If they want to bring rates down, then that’s the course I feel we ought to plan and invest on. I believe that if we focus on yields, they may offer clues as to stock performance.
So what is the second theme? Politics. Not that the media would let us forget, but this is a big election year that may undoubtedly have some craziness involved. Just remember, according to research by JP Morgan the S&P 500 tends to rise during an election year regardless of Republican, Democrat or a divided government.4
As we embark on a new year, I’m excited at the prospects. It appears we have declining rates in front of us and stocks entered the year in what I would call a confirmed uptrend. I look forward to working with you and am excited to get together and assess how your portfolio is tracking! Thank you for your confidence in me.
Successfully,
Tim Truebenbach, CFP®
Senior Vice President – Financial Advisor
Disclaimers and Sources:
1 Source: JP Morgan Weekly Recap, 1/1/2024, S&P 500
2 Source: JP Morgan Weekly Recap, 1/1/2024, Barclays AGG, MSCI EAFE and MSCI EM
3 Source: Fortune, 1/3/2024, Fed Chief Jerome Powell left interest Rates Unchanged, by Paul Wiseman
4 Source: JP Morgan Guide to the Markets, 1Q2024, Government control, the economy and stock market, p. 68
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Tracking # 524557