In 2023, stocks and bonds both rallied. The first quarter of 2024, however, saw stocks reaching new heights, whilebonds experienced a modest downturn, as the market scaled back its rate cut expectations following surprisinglystrong economic data.
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weekly_market_recap-04-01-2024
U.S. 10-year Treasury yields have increased 34 basis points year-to-date and have remained above 4% since earlyFebruary. Yet over the same period, stocks have rallied 10%. At first glance, this dynamic may seem counterintuitive,because high and rising interest rates are typically associated with weaker equity market performance.… Read More
After the U.S. economy’s impressive 4% annualized growth in the second half of 2023, investors are searching for cluesas to whether this strong momentum will persist into 2024. For much of this quarter, the closely watched Atlanta FedGDPNow model has forecasted growth of at or above 3%.… Read More
The U.S. economy has seen a significant normalization in labor demand since the pandemic. Last week’s JOLTSreport showed 8.9M job openings in January 2024, a 27% fall from the peak of 12.2M openings in March 2022. With theeconomy expected to soften further this year, labor demand in most sectors will continue to moderate.… Read More
Given high short-term yields, many investors seeking income have recently piled into cash. Others, however, havebeen attracted to high yield (HY) bonds, given yields of close to 8% in a falling inflation, steady growth environment.
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weekly_market_recap-03-04-2024
Market expectations for Fed policy have swung dramatically over the past few months, from the higher-for-longer narrative to expectations of aggressive policy easing. With stronger-than-expected jobs and growth data this year and inflation still mild, investors have had to reassess their outlook for policy rates.… Read More
Last week’s January CPI report came in above expectations, with headline CPI rising 0.3% m/m and 3.1% y/y. Shelterprices, which increased 0.6% in January, accounted for over 2/3 of the monthly increase in headline CPI.
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weekly_market_recap-02-19-2024
Inflation is often feared to be a self-fulfilling prophecy, as consumers and businesses that expect higher prices mayinadvertently fuel inflationary pressures themselves. For example, consumers may ask for a raise or accelerate purchases to front-run rising prices, while businesses may hike prices in anticipation of higher input costs.… Read More
Last week, the Middle East conflict escalated with the tragic attacks on U.S. troops and more threats on ships in the RedSea. Along with causing more volatility in oil prices, the conflict is negatively impacting global maritime trade. Just inthe past two months, traffic through the Suez Canal, which handled 12-15% of global maritime trade in 2023, has beenreduced by 42% according to the UN.… Read More
After a two-year stretch marked with significant uncertainty, the S&P 500 overcame the “wall of worry” about a potentialhard landing for the U.S. economy, achieving a new all-time high on Jan. 19 and notching successive highs for fivestraight days last week.… Read More