Even through inflation spikes and volatile periods, markets have still hit record highs in 2024.
What a difference a few months, or even weeks, can make. The state of the markets continues to be positive, though we did see the markets respond negatively as investors got jittery when the January inflation report showed higher-than-expected consumer prices. Although inflation was still down year-over-year at 3.1% – better than December’s 3.4% – the consensus was that it would come in around 2.9% in January [1]. A warmer inflation number could mean that the Fed could keep rates “higher for longer”.
Otherwise, the markets have been positive so far this year, with new all-time highs being recorded by the S&P 500, DJIA and NYSE Composites [2]. Perhaps more of a psychological boost than anything, but the S&P also reached the 5,000 level for the first time ever. Additionally, the VIX Index, which measures volatility, is in the “low” volatility zone, which is usually good for stocks, as it corresponds to a less stressful period for the markets.
The one theme that persists is that we are still not seeing all components of the market moving in the same direction, in particular, small cap stocks are still lagging. But market breadth, which is the ratio of the number of advancing stocks to declining stocks, is getting better, as evidenced by the stock participation driving the various all-time highs. Although it won’t be a surprise if we saw some pullback or even a correction in the near term, it’s all within the confines of this positive uptrend we’re seeing.
Regardless of what the markets do from here, remember that our money managers each maintain a strict discipline according to their own investing rule sets and manage according to the ‘data’. So, for now we are going to stay the course.
If you have any questions or would like to do a review, please reach out to our office, as we’re already booking reviews over a month out. As always, we’re just a call or email away. If you’re ready to book an appointment, click here, or give us a call at (262) 230-1095.
Sources:
- The Wall Street Journal, February 13, 2024.
- Lowry’s Research
