Welcome to Spring 2024! We hope this message finds you well and hope that you have found a few moments to enjoy the ever-changing weather. Our family was able to get away for Spring break to enjoy some warmer weather last month and now our focus turns to getting all the spring cleanup projects done as we race towards the warmer summer months ahead. In almost every year since I have begun monthly reporting, there always seems to be a looming house project which is brought to light in the March market review and this year it looks like “siding & gutters” has taken the #1 spot. Ah… the joys of homeownership! At least with this project, I know that I cannot convince Kim that this should be a family project, so I will leave this to the professionals.
Just like I will be leaving the siding and gutter replacement project to professionals, we continue to leave it up to the Federal Reserve to steer the economy through this unique economic cycle. The uniqueness of this situation cannot be understated, and I have highlighted along the way since the pandemic month of March 2020. If this is your first monthly report, here is a quick and simple synopsis:
There was unprecedented monetary and fiscal stimulus in 2020 and 2021, followed by a rapid rise in interest rates in 2022 and 2023 as inflation reached levels that have not been seen since the 1970s. In the housing market, many homeowners have been locked into low mortgage rates during the past few years, which has effectively limited the impact of rising rates. The labor market remains relatively tight after five million workers left the labor force during the pandemic and didn’t return, which has never been seen before. These themes won’t reverse quickly, and they will have long lasting effects. Just like I do not want to install siding & gutters, I do not envy the herculean task of the Federal Reserve. But with all this unprecedented chain of events, there are 2 things that have gone reasonably unchanged. The markets continue to weather the storm to push higher, and the US economy continues to stay strong.
In wrapping up the 1st Quarter of 2024, we saw markets in March continue to broaden their gains as the Fed backed up their commitment to cutting rates this year, but the number of rate cuts expected has been reduced. With global and geopolitical concerns on top of everyone’s mind, we saw the return of Energy as the leading sector for the month as Oil prices moved higher globally, and the Real Estate sector posted another negative monthly return at -1.32%. We did see the S&P 500 finish the month at +3.10%, while the Nasdaq as a growing trend pulled up the rear, finishing up only +1.79%. If all the information above wasn’t unprecedented enough, it was quite shocking to see Apple finish the month of March down -5.00% and it being one of largest lags in the market by being down nearly -10% for the year as the company faces its own challenges. These certainly are unique times.
