Market Recap: April 2024
Market commentary
- Elevated wage pressure and higher-than-expected CPI readings have led to renewed inflation concerns, likely keeping the Fed on hold for longer.
- Some signs that consumer resilience is being tested, with confidence declining and companies like Starbucks and McDonalds noting an increasingly challenging environment.
- The first estimate of first-quarter GDP came in lower than expected, driven by a surge in imports and inventory build.
- Manufacturing dipped back into a contraction after growing in March for the first time since September 2022.
Select economic and market data
Statistic (monthly unless noted) |
Current |
Previous |
---|---|---|
U.S. GDP (quarterly) | 1.6% | 3.4% |
Consumer Confidence | 97.0 | 103.1 |
Consumer Price Index Y/Y | 3.5% | 3.2% |
Core PCE (x food & energy) | 2.8% | 2.8% |
ISM Manufacturing Index | 49.2 | 50.3 |
Unemployment Rate | 3.8% | 3.9% |
2-Year Treasury Yield | 5.04% | 4.62% |
10-Year Treasury Yield | 4.68% | 4.20% |
Equities
- U.S. equity markets declined for the first time in five months as inflation concerns once again took center stage.
- International markets fared better, with the developed market index posting a smaller loss than the U.S. averages and the emerging market index posting a small gain.
- The small-cap Russell 2000 index wiped out all of its gains for the year and then some, with a 7% loss in April.
Fixed income
- Fixed income returns were negative as yields jumped on higher inflation readings.
Strategic outlook
- Some caution warranted on equities in the near-term, particularly in high-growth large cap stocks after recent rally; currently favoring small-cap and mid-cap domestic stocks longer-term.
- Above-average volatility is likely given central bank involvement and geopolitical uncertainty.
- Near-average expected returns projected for fixed income after period of rising rates and bond market sell‐off.
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