Letter From The Editor, John Norris
After a feverish end to 2023 in both the economy and the markets, the question on everyone’s minds was what they would do for an encore to start 2024. Despite the somewhat softer economic data, investors apparently didn’t get the news, at least not stock investors, who showed continued optimism. Unfortunately for bond buyers, 2024 started off as a repeat of 2023. Lots of red ink.
The reason behind this pattern lies in the markets’ belief that the Federal Reserve will come to the rescue for whatever ails us, and will cut the overnight lending rate. Doing so will make money less expensive in the economy, which should lead to greater lending and money supply growth. Historically, this has always fueled economic activity.
As I type this at the end of the 1st quarter of 2024, investors believe the Fed will potentially cut the overnight rate by 0.75%, or 75 basis points, within this year. The hope is that it will be even more substantial than that. However, for such an aggressive monetary easing to take place, there will have to be a more pronounced decrease in the rate of inflation, and the labor markets will have to cool more than they already have.
Predictions for 2nd Quarter
Delayed rate cuts, softening labor markets, bank consolidations and other projections from our Investment Committee for the second quarter.
Key Takeaways from 1st Quarter
We kicked off 2024 with a surge in the stock market, inflation challenges, elevated interest rates and a clear indicator that AI is here to stay.
1st Quarter Equity Review, 2024
The stock market is considered a leading economic indicator – meaning the market will start to move ahead of economic visible changes. Given the sharp upward trend over the last 5 months, what future economic conditions is the market anticipating?
1st Quarter Asset Allocation, 2024
We do not want to look a gift horse in the mouth; however, we do want to be prepared to capitalize on any opportunities that present themselves over the coming few quarters. As always, we will continue with our mandates of protecting downside and maximizing risk-adjusted returns.
Special Report: Corporate Earnings Season
It is not a stretch to say that corporate earnings are the single most important factor in determining a value for that company, or its stock price. Each quarter, every publicly traded company announces their financial results of the previous quarter and give updates (or guidance) on current conditions and any changes in expectations for future quarters.
