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Your Monthly Market Newsletter, April 2024

Your Monthly Market Newsletter, April 2024

April 15, 2024

Hello April! Spring is here, and the beauty of the season is in bloom earlier than usual for large parts of the country thanks to winter’s record warmth and historically low snow cover. According to the U.S.A. National Phrenology Network – which tracks the progression of spring – this year’s “leaf out” occurred earlier across the mid-section of the U.S. and along the west coast (“leaf out” is when leaves first appear on early-spring shrubs and plants). The early buds also mean a longer and more intense allergy season. If you’re one of the millions who suffer each year, it’s time to stock up on tissues and make plans indoors – it’s likely to be a rough spring.

As a fantastic Q1 wraps up for the stock market, investors remain cautious yet optimistic that the Federal Reserve will cut interest rates in 2024. However, the Fed indicated it is in no hurry to cut rates just yet even though the economy and labor market remain strong, and inflation continues to decline. They are still focused on an inflation rate that remains above their 2% target.

Though the solar eclipse on April 8 will be visible as a partial eclipse across much of the United States, millions are expected to travel to the states located within the path of totality to experience the whole phenomenon. The states situated on the narrow 115-mile path are projected to receive an economic boost totaling more than $1 billion, with Texas expected to see the most visitors. If you’re not one of the lucky ones who will get to experience the total eclipse, mark your calendar for August 12, 2045. Another total solar eclipse is expected to cross the U.S. that day from coast to coast.

April is Financial Literacy Month, a great reminder of the importance of understanding basic financial skills such as managing personal finances, budgeting, and investing. Having a solid base of financial knowledge can help you achieve your financial goals, prepare for emergencies, and feel more confident making financial decisions. If you have any questions, don’t hesitate to contact our office for help. We love to help folks feel more confident about their financial futures.

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Stocks

Equities continued to gain momentum in March, with all three major indices - the S&P 500, Dow Jones, and NASDAQ - garnering over 1% returns to close off the quarter. In a reversal from the previous few months, the tech-heavy NASDAQ was the lowest of the three indices. Though the Technology sector has increased month-to-date, it has lagged compared to other sectors. The Federal Reserve (Fed) struck optimism in equity investors by acknowledging it still intends to cut rates three times in 2024. March also marked the first time since November of 2021 that all three equity indices closed at an all-time high.

US Large Cap Stocks Data

Sector Performance

Every sector posted positive returns in March, with all but Real Estate in the green year-to-date. The three top-performing sectors were a reversal of those on top in 2023. Energy, Utilities, and Materials notched the three highest returns, and Technology ranked toward the bottom. As energy prices continue to rally, energy stocks are likely to benefit. Additionally, continued federal spending to revitalize manufacturing and infrastructure in the U.S. should keep stocks like Industrials and Materials on top, while a potential peak in rates may provide relief to the real estate sector.

U.S Performance Sector Ranked by MTD Performance

Bonds

Fixed income had its best month of the year as rates ceased climbing. Although still down year-to-date, each of the three major bond indices below posted increases in March. Interest rates on both 2-year and 10-year Treasury yields rose 12 bps and 3 bps, respectively, allowing investors to fully take advantage of bonds’ strong yields. Stronger-than-expected economic and labor data led to a rise in yields throughout the first three months of the year as investors confronted the likelihood fewer rate cuts than originally expected will happen in 2024.

Economic Update

Economic resiliency continues to be the headline based on March’s results. Though the Consumer Price Index (CPI)’s inflation rate remains stubborn about falling to the Fed’s 2% target, the Gross Domestic Product (GDP) was revised higher in its final reading for 2023, showing consumer strength through the end of last year. The University of Michigan Consumer Sentiment index was also revised upward, showing consumers are gaining confidence in their economic health.

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Managing Money as a Couple
Keys to preparing to grow wealthy together.
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Countdown to College
Preparing for college means setting goals, staying focused, and tackling a few key milestones along the way.
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Making a Charitable Contribution
There are benefits and limitations when you decide to donate stock.
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Raising Healthy Children
Healthy habits are one of the greatest gifts to give your child.

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Bees Capable of Learning Complex Tasks, Much Like Humans

A close-up of a fuzzy bumblebee clinging onto a white vertical surface

Like humans, bumblebees can socially learn complex behavior from other bees, according to a recent study exploring learned behaviors in invertebrate species. The study, published in Nature, found that bumblebees can be taught non-natural complex tasks and then teach these tasks to other bees. The capability to pass on knowledge of complex tasks was originally thought to be unique to humans and our ancestors. 

Researchers trained bees to open a two-step puzzle box to conduct the study. To solve the puzzle, the bees first had to move an obstacle and then rotate a transparent lid to receive a reward. The bees were initially given 24 days to figure out the puzzle through trial and error. However, none of the bees could complete the puzzle on their own. Then, researchers introduced a sugary treat as a reward at the first step when the bees removed the initial obstacle. With encouragement from the reward, it took two days to train the bees to complete the puzzle. These trained demonstrator bees then showed untrained bees how to open the two-step box. Surprisingly, the untrained bees quickly solved the puzzle, even without receiving the sweet reward. The experiment proved that bees are social learners and may be capable of passing cultural traditions to one another.

The act of socially passing a particular learned behavior to others is part of the definition of culture. Human culture is quite complex – it is built on knowledge that has been passed down through generations and continues to evolve with improvement in skills and technology. Though some animal species have demonstrated culture, discovering culture in invertebrate species hasn’t been found until this study. 

If you want to learn more, check out the entire paper here.

THOUGHT FOR THE MONTH

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Index Definitions

Dow Jones Industrial Average: The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.

Dow Jones U.S. Real Estate Total Return Index: The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.

NASDAQ Composite: The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector. 

S&P 500 Bond Index: The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.

S&P 500 Consumer Discretionary: The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.

S&P 500 Consumer Staples: The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.

S&P 500 Energy: The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.

S&P 500 Financials: The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.

S&P 500 Index: The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.

S&P 500 Utilities: The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.

S&P U.S. Aggregate Bond Index: The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.

S&P U.S. Treasury Bond Index: The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.

Disclosures 

PLEASE NOTE: When you link to any of the websites displayed within this email, you are leaving this email and assume total responsibility and risk for your use of the website you are linking to. We make no representation as to the completeness or accuracy of any information provided at these websites.

A portion of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

Index performance does not reflect the deduction of any fees and expenses, and if deducted, performance would be reduced. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance cannot guarantee future results. 

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect again loss. In general, the bond market is volatile; bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed-income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Vehicles that invest in lower-rated debt securities (commonly referred to as junk bonds or high-yield bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. International investing involves special risks not present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets.

The statements provided herein are based solely on the opinions of the Osaic Research Team and are being provided for general information purposes only. Neither the information nor any opinion expressed constitutes an offer or a solicitation to buy or sell any securities or other financial instruments. Any opinions provided herein should not be relied upon for investment decisions and may differ from those of other departments or divisions of Osaic or its affiliates.

Certain information may be based on information received from sources the Osaic Research Team considers reliable; however, the accuracy and completeness of such information cannot be guaranteed. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein reflect the judgment of the Osaic Research Team only as of the date of this document and are subject to change without notice. Osaic has no obligation to provide updates or changes to these opinions, projections, forecasts and forward-looking statements. Osaic is not soliciting or recommending any action based on any information in this document.