2024 Q2 Commentary

Market Review

The second quarter of 2024 may be best remembered as a period of moderation. Economic indicators largely reflected slowing growth and easing inflation. First quarter Gross Domestic Product (GDP) growth was reported at 1.4%, down from the 3.5% growth tallied in the fourth quarter of 2023. Unemployment rose to 4.0% and the rate of inflation slowed to 2.6% as measured by the Bureau of Economic Analysis’ Personal Consumption Expenditures (PCE) Index. Expectations for future rate cuts have dropped to one or two over the remainder of 2024, with the consensus forecast being interest rates that are “higher for longer”. The U.S. 10-Year Treasury Bond yield ended the quarter about where it began, at 4.36%.

Moderation was the theme in equity markets as well. Large capitalization stocks, as measured by the S&P 500, rose 3.9% in the second quarter. However, as has been the case since the market lows in October 2023, the gains were largely driven by artificial intelligence related stocks. Small capitalization stocks lagged again, with the Russell 2000 Index declining -3.3% and the Russell 2000 Growth Index declining -2.9%.