Insights

We remain cautious in our approach and are diligently focused on diversification and selection. Participating in market upside, both domestically and abroad, has been meaningful. However, without calling for a drawdown, we do understand pauses and pullbacks are a common market phenomenon. With such a strong start to the year, this increases the likelihood of near-term volatility.

Stock prices continued to rally in February, with the S&P 500 Index crossing the 5,000 level for the first time in the index’s history. Growth equities led the rally as strong earnings from technology names aided returns. International stocks participated but trailed their U.S. counterparts. Interest rates continued higher over the course of February as strong economic data and hot inflation reports pushed back the markets’ expectations for rate cuts. Fixed income experienced muted returns as price declines were offset by coupon payments.

Stock prices moved higher in the first month of 2024, with growth equities again outpacing value names. International stocks were not as fortunate as overseas markets were weighed down by poor returns from Chinese equities. Interest rates ticked slightly higher over the course of January, leading to muted fixed income returns as coupon payments offset bond price depreciation.

At the beginning of 2023, the most pivotal question was if the Federal Reserve could adeptly guide the economy to a soft landing amid the ongoing tightening cycle. While the jury is still out, it seems the Fed has concluded its interest rate hikes, given easing inflation pressures. Judging by market performance, where the S&P 500 Index surged by over 26% throughout the year, one might be inclined to view this as a successful mission.

U.S. stocks bolted higher in November as the S&P 500 Index gained 8.9%. Coming into November, the S&P 500 Index was on a three-month losing streak, sinking nearly 10% from recent highs reached at the end of July.

U.S. stocks continued to retreat in October as higher interest rates weighed on equity valuations. The S&P 500, an index of large cap U.S. stocks, fell 2.1% in October. Since hitting a recent peak on July 31, 2023, the Index has recorded three consecutive months of negative returns, with the drawdown totaling 8.6%.

Despite facing challenges such as heightened inflation, stringent monetary policies, an ongoing conflict in Europe, a banking crisis at the beginning of the year, and tense relations with our largest trading partner, economic indicators have displayed remarkable resilience.

U.S. stocks took a breather this month as the S&P 500, an index of large cap U.S. stocks, fell 1.8% in August. After the rapid, AI-fueled gains seen in the first seven months of the year, a modest pullback in equities seemed all but inevitable as we headed into the typically slow, late summer month.

U.S. stocks continued to grind higher throughout July with the S&P 500, an index of large-cap U.S. stocks, rising 3.2%. Market performance was more broad-based this month with the Russell 1000 Growth Index gaining 3.4% and the Russell 1000 Value Index climbing 3.5%. International stocks slightly outperformed as the MSCI ACWI ex-USA, an index of non-U.S. stocks, rose 3.9%.