Market Commentary
The third quarter of 2024 started with an increase in volatility as the yield curve started to un-invert after being inverted the last two years. Stock market indices corrected into an August low and proceeded to quickly recover but we saw a major shift in leadership as Utilities and REIT’s and Value outperformed while Growth and The Mag-7 trailed after dominating over the last year. The S&P 500 rallied 5.89% while the Dow Utilities were up almost 18% for the quarter! This rotation was driven in part by the Federal Reserve’s first interest rate cut in September, which signaled the beginning of a new easing cycle. The anticipation of this rate cut boosted bonds, with falling Treasury yields and tightening credit spreads reflecting investor optimism about future rate cuts. However, since the interest rate cut, the 10-year government bond yield has stabilized and stopped going down.
Growing U.S. government debt put a bid into gold since a low in November ’22, and it marched higher, up 13% in the 3rd quarter. This along with a dovish Fed has created weakness in the U.S. Dollar. A beneficiary of the weaker Dollar are emerging markets and late in the quarter we also saw China finally make a significant move to fight their economic problems with large amounts of stimulus lifting Chinese markets out of their doldrums.
The weakest performance this year and in the 3rd quarter was in energy markets – Crude oil was down 16%. However, if there is one area of the markets that participants are wrong sided by record amounts, it is underweight and short energy. This is of major importance as lower energy prices are expected during Presidential elections but we have major unrest in the Middle East. A move higher would catch many wrong footed.
Advice Corner
Check out our 3rd Quarter 2024 articles on 401(k) rollovers, summer vacation deals, ETF investment considerations, our favorite financial related books, understanding 401(k) fees and 401(k) employer matching.
- 401(k) Rollovers Not Just for Retirees – More and more employers are offering a choice between a Traditional 401(k) or a Roth 401(k). So, what’s the difference? And how do you know which one is right for you? Find out in our article.
- A Strong Dollar Means Summer Vacation Deals – If you’ve followed the market, you’ve watched the U.S. Dollar gain strength. Our article examines the impact of the strong dollar and what it could mean for your summer travels.
- 3 Essential ETF Investment Considerations – Over the past 20 years, we’ve seen the proliferation of exchange-traded funds (ETFs) and their disruptive forces across global financial markets. If you’re new to ETF investing, you might be wondering where to start and what they can offer your portfolio. Explore the basics you should keep in mind as you consider ETFs here.
- 3 of Our Favorite Engaging (and Not Stuffy) Financial-Related Books & Why – Our team is always reading (and sometimes re-reading) books by authors from various fields and backgrounds. We have a few favorites in particular that have positively impacted our money mindsets and habits. Check out three engaging and enlightening financial-related books!
- 401(k) Employer Matching: Sometimes There Really is a Free Lunch – A 401(k) contribution match is one of the best benefits an employer can offer—it’s essentially free money for your future. Take a closer look at employer matching and what it can mean for your retirement strategy by reading our article.
- How Expensive is Your 401(k) Plan? – Researching and understanding fees in your 401(k) plan could make a significant difference in your future retirement. What are those fees, exactly? And how can you identify them and ensure your investment vehicles are optimal for your retirement goals? Our article can help you know what to look for.
For more information, contact the Carlson Team today!
Carlson Investments does not provide tax, legal, or accounting advice. This content has been written for informational purposes only. Always consult your individual tax, legal, or financial professionals for advice tailored to your situation.
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