The positive trends that we have seen in much of 2024 continued in March. This month marks the fifth consecutive month higher for markets. The economy remains resilient despite stubborn inflation, which led the Fed to keep rates unchanged.

Market

Stocks continued their march higher; however, unlike previous months, gains were spread across regions and capitalizations. U.S. large stocks rose 3.2% for the month to close out a 10.6% quarterly rally. Value stocks outpaced their growth counterparts by over 3%, finishing up 5% for the month. Small and mid-cap stocks joined the bull run and were up 3.2% and 5.6%, respectively. Foreign developed and emerging markets followed suit, up 3.4% and 2.5%.

The broadening was also seen in other markets. The U.S. bond market posted a modest 0.5% increase as yields retreated on longer-dated bonds. Commodities also popped with oil up over 5% and gold prices rising to a record high of $2,200/oz. Bitcoin was also in the headlines, briefly surpassing $70,000. If all of that wasn’t enough, cocoa prices surged to record highs due to severe weather.

Economy and the Fed

The economy continued to surprise analysts. Consumer spending and gross domestic product (GDP) rose in March. Inflationary pressures persisted as the Consumer Price Index (CPI) rose 0.4% for the month, and 3.2% for the year. Producer prices rose 0.6%—more than double what most analysts were expecting. It was no surprise that the Federal Reserve left interest rates unchanged at 5.25-5.50% for the fifth consecutive meeting. They did, however, update their interest rate projections which led to the market expectation of three rate hikes by year end. Jerome Powell also indicated that they now expect GDP to be 2.1% for 2024, from their precious estimate of 1.4%.

Looking Ahead

Dating back to 1950, a strong first quarter has generally led to a positive outcome for the rest of the year 94% of the time. It is also worth noting that a presidential election has generally been positive for the market, regardless of who is the winner.

March was a positive month for both markets and the economy. The Fed’s dovish revisions and continued economic strength led to broad-based market gains. However, inflation remains a concern, and the Fed’s future decisions will be closely watched in the coming months.

 

 

Disclosure

© 2024 Sanderson Wealth Management LLC. This information is not intended to be and should not be treated as legal, investment, accounting or tax advice and is for informational purposes only. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal, accounting, or tax advice from their own counsel. All information discussed herein is current as of the date appearing in this material and is subject to change at any time without notice. Opinions expressed are those of the author, do not necessarily reflect the opinions of Sanderson Wealth Management, and are subject to change without notice. The information has been obtained from sources believed to be reliable, but its accuracy and interpretation are not guaranteed.