Despite fears of a slowing economy and upcoming election uncertainty, stocks rose in September marking 8 out of 9 positive months for the S&P 500 Index to start 2024.
Inflation readings have continued to fall, providing the Federal Reserve with increased confidence to cut rates.
Bonds extended their winning streak to 5 consecutive months with the Bloomberg Aggregate Bond Index rising 1.3% in September.
Real GDP growth was unrevised at a 3.0% annualized rate, confirming strong momentum in the first half of the year.
Initial jobless claims fell more than expected, slowing the rise from the previous few months.
Recent China stimulus which included cutting mortgage rates, encouraging share buybacks and bond issuance have led to a 24.4% rise in the MSCI China Index during September.
Lower mortgage rates have also sparked a wave of refinancing activity, which has surged to its highest level since April 2022.
The underlying components of the S&P 500 continued to show a broadening in terms of return contribution. There are now 4 sectors outperforming the broader market on a YTD basis versus just 2 sectors back in July.
We continue to favor a diversified approach within the equity allocation, including mid and small cap stocks to capture the broadening participation in the market.
With the Fed cutting rates in an effort to orchestrate a “soft landing”, investors will need to keep an eye on inflation for signs of reaccelerating toward the end of the year.
Over the next few months, we see potential for short-term volatility with the approaching US presidential election and economic readings that will provide more clarity on whether the economy will achieve the desired soft landing or tip into a recession.
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The statements contained herein are based upon the opinions of Bison and the data available at the time of publication and are subject to change at any time without notice. This communication does not constitute investment advice and is for informational purposes only, is not intended to meet the objectives or suitability
requirements of any specific individual or account, and does not provide a guarantee that the investment objective of any model will be met. An investor should assess his/her own investment needs based on his/her own financial circumstances and investment objectives. Neither the information nor any opinions expressed herein should be construed as a solicitation or a recommendation by Bison or its affiliates to buy or sell any securities or investments or hire any specific manager. Bison prepared this Update utilizing information from a variety of sources that it believes to be reliable. It is important to remember that there are risks inherent in any investment and that there is no assurance that any investment, asset class, style or index will provide positive performance over time. Diversification and strategic asset allocation do not guarantee a profit or protect against a loss in a declining markets. Past performance is not a guarantee of future results. All investments are subject to risk, including the loss of principal.
Index definitions: “U.S. Large Cap” represented by the S&P 500 Index. “U.S. Small Cap” represented by the S&P 600 Index. “International” represented by the MSCI Europe, Australasia, Far East (EAFE) Net Return Index. “Emerging” represented by the MSCI Emerging Markets Net Return Index. “U.S. Aggregate” represented by the Bloomberg U.S. Aggregate Bond Index. “Treasuries” represented by the Bloomberg U.S. Treasury Bond Index. “Short Term Bond” represented by the Bloomberg 1-5 year gov/credit Index. “U.S. High Yield” represented by the Bloomberg U.S. Corporate High Yield Index. “Real Estate” represented by the Dow Jones REIT Index. “Gold” represented by the LBMA Gold Price Index. “Bitcoin” represented by the Bitcoin Galaxy Index