Market Recap: April 2024

Market commentary

• Elevated wage pressure and higher-than-expected CPI readings have led to renewed inflation concerns, likely keeping the Fed on hold for longer.
• Some signs that consumer resilience is being tested, with confidence declining and companies like Starbucks and McDonalds noting an increasingly challenging environment.
• The first estimate of first-quarter GDP came in lower than expected, driven by a surge in imports and inventory build.
• Manufacturing dipped back into a contraction after growing in March for the first time since September 2022.

Select economic and market data

Equities

• U.S. equity markets declined for the first time in five months as inflation concerns once again took center stage.
• International markets fared better, with the developed market index posting a smaller loss than the U.S. averages and the emerging market index posting a small gain.
• The small-cap Russell 2000 index wiped out all of its gains for the year and then some, with a 7% loss in April.

Fixed income

• Fixed income returns were negative as yields jumped on higher inflation readings.

   

Strategic outlook

• Some caution warranted on equities in the near-term, particularly in high-growth large cap stocks after recent rally; currently favoring small-cap and mid-cap domestic stocks longer-term.
• Above-average volatility is likely given central bank involvement and geopolitical uncertainty.
• Near-average expected returns projected for fixed income after period of rising rates and bond market sell‐off.