Q2 2024 Market Update
Market Snapshot
*As of 6/28/2024
By the Numbers
  • The S&P 500 has achieved over 30 new all-time highs in the first half of 2024
  • There is $6.1 Trillion in cash and Money Market Funds today as investors enjoy generous short-term yields on cash
  • Information Technology and Communication Services sectors have seen YTD gains of 28.2% and 26.7%, respectively
  • Nvidia alone contributed 34.5% of the S&P 500 return so far in 2024
  • The 10 largest members of the S&P 500 account for 35% of the total value of the index
  • Of the 11 major sectors in the economy, all but one are positive so far in 2024
  • Core CPI rose 0.2% in May, or 3.4% year-over-year, a healthy deceleration from the previous month’s 3.6% pace

Market Update 

Despite ongoing economic uncertainty, the stock market has experienced a strong rally as investors anticipate the first Fed rate cut and the rally in artificial intelligence stocks continues. During the first six months of the year, the S&P 500 gained 15.3% with dividends, the Nasdaq 18.6%, and the Dow Jones Industrial Average 4.8%. This warrants a word of caution since the indexes, especially the NASDAQ and S&P 500, remain heavily influenced by just a few stocks. For example, the single company Nvidia accounts for nearly 35% of the S&P gains so far in 2024.

The 10-year Treasury yield declined from its April peak of 4.7% to 4.4%, allowing the overall bond market to be roughly flat on the year. International stocks have performed better as well, with developed markets generating 5.7% and emerging markets 7.7%.

The recession that was anticipated at the beginning of the year has not yet occurred and there are signs that inflation, which ran hotter than expected for a few months, is beginning to improve.

Of course, the market’s focus will now shift toward major events in the second half of the year. Perhaps the most notable is the upcoming presidential election. As investors prepare to cast their ballots in November, they will also wonder what each political party could mean for their portfolios and financial plans. Investors will also watch the timing and number of Fed rate cuts closely since lower rates are generally positive for both stocks and bonds.

What about interest rates?

Investors have been anticipating the first rate cut of the cycle since the beginning of the year. This has not only driven returns, but is one reason markets have swung so much when new economic data has caused expectations to shift.

The accompanying chart shows the possible path of the federal funds rate based on the Fed’s latest projections. At its last meeting, the Fed cited strong job gains and low unemployment as indicators of solid economic activity but emphasized that “inflation has eased over the past year but remains elevated.” Fortunately, the latest inflation data in May showed a significant deceleration that has preserved the possibility of a rate cut this year.

Many of the additional rate cuts that investors previously expected have simply been pushed into next year and will depend on the economic data over the next six months. Regardless of the exact timing and path of Fed rate cuts, these projections represent a reversal of the emergency monetary policy actions that began in early 2022.
We will continue to monitor the Fed moves, as well as other key economic data, and adapt our portfolio construction accordingly.

With inflation cooling, the Fed is on track to cut rates later this year

Sources: Clearnomics, Federal Reserve
© 2024 Clearnomics, Inc

The views expressed represent the opinions of Tiller Private Wealth as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed. 

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website. Past performance is not a guarantee of future results.

The market indices discussed are unmanaged. Investors cannot directly invest in unmanaged indices.

The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The market index is unmanaged.

The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

Data sources: Clearnomics, YCharts, BankRate, Apollo, Treasury Department, & US Federal Reserve.