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Stocks Rally as Market Leadership Shifts in Early 2025

Monthly Market Summary The S&P 500 Index returned +2.7%, marginally outperforming the Russell 2000 Index’s +2.5% return. Seven of the eleven S&P 500 sectors outperformed the index, as AI-related news led to a sell-off in Technology stocks. Corporate investment-grade bonds produced a +0.6% total return as Treasury yields edged lower…

01/01/25 | Quarterly Letter

4Q 2024 Recap & 1Q 2025 Outlook

Key Updates on the Economy & Markets There was no shortage of market-moving events in Q4. The stock market opened the quarter with a slow start in October, but the outcome of the presidential election triggered a broad rally in November, which faded as the year ended. The credit market…

01/01/25 | Chart of the Month

Long-Term Perspective: Understanding How Valuations Impact Portfolio Returns

The S&P 500 has rallied +50% since the start of 2023 and more than +150% from the COVID pandemic low in March 2020. The rally has produced a long list of all-time highs and boosted investment portfolios, but it has made broad market indices more expensive. The S&P 500 currently…

12/01/24 | Chart of the Month

S&P 500 Sets More Than 50 New Highs in 2024

The past two years have been remarkable for investors, with the S&P 500 posting back-to-back gains of over +20%. The chart below takes a closer look at 2024’s price movement and uses yellow shading to mark the days when it closed at an all-time high. At the start of this…

12/01/24 | Monthly Letter

Stocks Trade Higher as Market Reacts to Election Results

Monthly Market Summary The S&P 500 Index returned +6.0% but underperformed the Russell 2000 Index’s +11.1% return. All eleven S&P 500 sectors traded higher, with Consumer Discretionary and Financials gaining more than +10%. In contrast, defensive sectors, such as Health Care, Utilities, and Consumer Staples, underperformed the S&P 500. Corporate…

11/01/24 | Chart of the Month

Early Post-Election Takeaways: Comparing 2024 to 2016

The election is over, and global markets are analyzing the outcome and starting to adjust forward market expectations. Republicans are set to control the White House, Senate, and House, but the results are also notable for a historical reason: the president-elect, Donald Trump, is returning to office after a previous…

11/01/24 | Monthly Letter

Treasury Yields Rise Following the Fed’s September Rate Cut

Monthly Market Summary The S&P 500 Index returned -0.9%, outperforming the Russell 2000 Index’s -1.4% return. Three of the eleven S&P 500 sectors traded higher, with Financials and Communication Services both gaining more than +1.5%. The remaining eight sectors all traded lower by more than -1% during the month. Corporate…

10/01/24 | Quarterly Letter

3Q 2024 Recap & 4Q 2024 Outlook

Key Updates on the Economy & Markets The most significant development in 3Q24 was the Federal Reserve’s decision to cut interest rates by -0.50%, the first rate cut of this cycle. It came as the Fed shifted its focus, with unemployment rising to a 33-month high and inflation moving back…

10/01/24 | Chart of the Month

Uncharted Territory: Understanding This Economic Cycle

The economy is in uncharted territory. Figure 1 graphs the Leading Economic Index (LEI), which tracks ten data points that tend to change before the overall economy does. Economists monitor the LEI because it includes data that can provide insight into future economic activity, such as unemployment claims, building permits,…

09/01/24 | Monthly Letter

Federal Reserve Set to Begin Cutting Interest Rates in September

Monthly Market Summary The S&P 500 Index returned +2.3% in August, outperforming the Russell 2000 Index’s -1.7% return. Nine of the eleven S&P 500 sectors traded higher, led by Consumer Staples, Real Estate, Health Care, and Utilities. Corporate investment-grade bonds produced a +1.9% total return as Treasury yields declined, slightly…

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