Following on the heels of a strong final quarter in 2023 for the equity markets, the First Quarter of 2024 provided more of the same with major indices posting positive returns.
Continuing economic growth, declining inflation and better than expected earnings guidance from corporations provided encouragement to investors. It appears the Federal Reserve may be able to engineer a soft economic landing, after all.
We note that this quarter, unlike the last few, provided for a much broader rally across growth and value sectors as investors seek more attractively priced stocks beyond the tech heavyweights. In addition to a strong domestic market, international stocks also posted a good quarter.
The fixed income market was a bit of a mixed bag with shorter maturities faring better than longer maturities. Investors seem to be considering the possibility of “higher for longer” interest rates as inflation remains above the 2% target, which negatively impacts the returns of longer-term bonds.
Looking ahead, we continue to focus on the Federal Reserve and ongoing commentary provided from Chairman Powell and his fellow Board of Governors. Any future Fed policy error, such as leaving interest rates too high for too long, remains a risk. And the global political unrest adds a complicating factor to the overall equation.
We close with a quote from Warren Buffett:
“The stock market is a device for transferring money from the impatient to the patient.”
As always, we thank you for your confidence in Pointe Capital Management. For more information, please click on the links below or contact us with any questions.