First Quarter 2024 In Review

Market Overview

Quite frankly, we cannot ask for much more than what we saw this quarter. While bonds were slightly down over the last 90 days, stocks across the board were positive, some in a very big way. It seems to have happened quietly without much fanfare. Of course this plays to our biases – surely we would have strong feelings about the markets if US large cap stocks were down 10% in 3 months, but we don’t give much credit to things moving up in the same magnitude.

If this quarter repeated itself indefinitely into the future we would all be wealth beyond our wildest dreams in a matter of years. Of course, we won’t! There will be some event in the future, some scare, news cycle, something new to worry us, and the tide will (temporarily) turn. But for now, it’s a good one and we’ll gladly take it. Just one more thought about this: if it is this easy to feel calm and settled and “normal” when the S&P 500 is up over 10% in a quarter, maybe we can all do the same the next time it’s down 10%?

	1Q 2024	1 Year	3 Year	5 Year
Large Cap US Stocks	10.16%	27.86%	9.77%	13.14%
Small Cap US Stocks	2.00%	13.75%	0.64%	7.44%
International Equity	5.06%	12.27%	2.09%	4.61%
EM Equity	2.37%	8.15%	-5.05%	2.22%
Aggregate Bonds	-0.56%	2.20%	-1.98%	0.62%

_{Index performance is provided as a benchmark. It is not illustrative of any particular investment. An investment cannot be made in an index. Past performance is not an indication of future of results. S&P 500, S&P 600, MSCI EAFE Index, MSCI EM Index, S&P US Agg Bond Index. Returns as of 3/29/24.}

Economic Update

So how does the economic data tie out to this market performance? Quite well, honestly. We remain in a goldilocks economic environment with solid growth, low unemployment, steady interest rates, falling inflation and good real estate data.

Fourth quarter real Gross Domestic Product was revised up to 3.4%, continuing a strong trend over the last year.

Inflation has cooled, only up 3.2% year over year. Clearly the strong inflation trend post-covid has leveled off.

In response to falling inflation, interest rates have also come down. Mortgage rates are off slightly, with the recent national average at 6.79%.

Falling rates have been good for the residential real estate market. The Case-Shiller national home price index was up 6% year over year in January, improving the trend from mid-2023.

Unemployment remains muted as the 4-week average remains very low at 210,000. The unemployment rate is now 3.9%