Happy Fall from Veritas! We hope your autumn is off to a great start! As the 3rd quarter of 2024 wraps up and we move into Q4, here’s a quick look at the latest news, developments, and market performance from the past quarter.
Daryl Marsden
Client Services Manager
In the News:
Federal Reserve Rate Cuts – After much anticipation, the Federal Reserve cut its benchmark Fed Funds rate by 50 basis points in September. This marks the start of a new rate-cutting cycle, aimed at supporting employment as the economy slows. Unemployment rose to 4.2%, up from 3.4% in early 2023, but consumer spending remains strong, providing a solid foundation for the economy.
U.S. Economy Resilience – Despite higher unemployment, the broader economy is showing resilience. GDP grew by 3% in Q2 2024, an improvement from 1.6% in Q1. Consumer income and savings are also rising, with real disposable income up 5.6% and the personal savings rate at 5.4%. These are good signs for ongoing economic stability.
Stock Market – The stock market continued to move positively for Q3 with all but small-caps producing double digit returns YTD. We did however see a swing away from the Mag-Seven and into the broader market with top producer coming from Large Cap value and Small Cap Companies.
Developments to Monitor:
Fed’s Monetary Policy – The Federal Reserve recently cut the Fed Funds rate by 50 basis points, signaling a commitment to reducing recession risks. We believe this easing should positively influence bond returns and support equity prices. However, the market is still pricing in 2 more 25 basis point cuts coming in November and December.
Labor Market Trends – With unemployment rising, the job market is cooling. However, the Fed’s rate cuts are designed to help sustain economic momentum, even as the labor market faces demographic challenges from an aging workforce.
Corporate Earnings – Q3 earnings season is on the horizon, and all eyes are on corporate results. Strong earnings have been a key driver of the market’s earlier gains, and further beats could provide a boost as we head into Q4.
Market performance for 2024 YTD:
- Equity benchmarks:
- S&P 500 (U.S. Large Caps): 22.08%
- Russell 2000 (U.S. Small Caps): 11.17%
- MSCI EAFE (International Developed): 12.99%
- Fixed income benchmarks:
- ICE BofA 1-10 Yr AAA-A-Rated US Corp & Govt (Bonds): 2024 4.59%
- Barclays US Aggregate Bond Index (Bonds): 4.45%
- Alternative investment benchmark:
- HFRX Global Hedge Fund Index (Alternative Investments): 5.08%
As we approach the end of the year, we believe the market outlook remains positive. We’ll continue to monitor these developments closely and keep you updated as we head into 2025. In the meantime, enjoy the fall season and the opportunities it may bring!
Sources:
1 Blackrock
2 ICE Index Platform
3 HedgeFundResearch.com
Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor. Stratos Wealth Advisors, LLC and Veritas Boston Wealth Management are separate entities.
“The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. No reader should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence.” Indices mentioned are unmanaged and cannot be invested into directly. Past performance is not a guarantee of future results.
