May 2024 Market Insights
Stocks climbed to new highs this month after a good corporate earnings season and modest inflation reports.
Stocks climbed to new highs this month after a good corporate earnings season and modest inflation reports.
After hitting an all-time high in March, the S&P 500 stock index proceeded to pull back over 5% in the first three weeks of April. As we mentioned before, 5% pullbacks happen in most years.
The first quarter ended with a new high for the S&P 500. Earnings growth expectations helped fuel the rally, which kept going despite higher interest rates. Higher rates pushed bond prices lower, resulting in a small loss for the Aggregate index, though our clients’ exposure to shorter-term corporate bonds and alternative funds typically resulted in a gain.
Positive stock momentum continued as earnings increased, inflation moderated, jobs remained strong, and interest rates remained range bound.
When will the Fed start cutting rates? The S&P 500 crossed above 5,000 for the first time, despite higher interest rates this year.
Markets are at all-time highs, GDP topped expectations, semiconductor (chip) stocks are the talk of the town, and the Fed is on hold (for now).
The fourth quarter saw year-to-date highs in stock prices, including the Dow Jones Industrial Average reaching 37,000 for the first time. The intertwined elements of lower inflation, expectations of Fed rate cuts, and lower interest rates were the primary drivers of higher stock prices and higher bond returns.
Markets on the move: stocks at or near all-time highs, the Fed pivot, lower bond yields, and gold Q&A.
The Fed headwind is lessening, earnings are rising, and seasonality is favorable.
The Fed has started to change their tune, jobs remain strong, and corporate earnings could be positive.