Weekly Market Review

I​t has been a strange start to the year, as the S&P 500 recently hit new all-time highs while other markets are down in the early going. Bond yields have risen from the recent lows as investors may be coming to grips with the idea that too many rate cuts are expected, and some adjustment is needed. Certain members of the Fed have suggested as much, and in our view, rate cuts are coming with the precise number not as important. 

If anything, fewer cuts might be better, as deep declines in short-term rates would likely be indicative of greater economic weakness. We will get some clues to the Fed’s plans this week as they hold their first meeting of the year. Right now, the debate is centered around the first rate cut taking place at either the March meeting or delaying it until the April/May meeting. We will also see how the better-than- expected Q4 GDP data (3.3% growth vs. 2% expectations) plays into the Fed’s decision. Despite some uneasiness to start the year, we remain cautiously optimistic about stocks in 2024. Our view is that markets are unlikely to move higher on a consistent basis, instead, it is more probable that we see continued ups and downs.

Index Descriptions:The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States.
The MSCI EAFE Index is a stock market index that measures the performance of large- and mid-cap companies across 21 developed markets countries around the world. Canada and the USA are not included. EAFE is an acronym that stands for Europe, Australasia, and the Far East.
The MSCI Emerging Markets Index captures large and mid-cap representation across 24 Emerging Markets (EM) countries.
The Bloomberg US Aggregate Bond Index, or the Agg, is a broad based, market capitalization-weighted bond market index represent- ing intermediate term investment grade bonds traded in the United States.
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