Market Recap: August 2024

Market commentary

• The Labor Department revised job figures downward, indicating that 818,000 fewer jobs were added from April 2023 through March 2024 than initially reported.
• Reflecting an upturn in private inventory investment, an acceleration in consumer spending, and offset by a downturn in residential fixed investment, second quarter GDP estimates indicate the economy expanded at an annual rate of 3.0%.
• Demonstrating improved optimism about the future, and despite concerns about the labor market, Consumer Confidence improved in August.

Select economic and market data

Equities

• Following sharp declines in early August, most indices rallied to finish the month with positive returns.
• The S&P 500 posted a 2.4% gain in August, exhibiting a fourth straight month of positive returns, while the small-cap Russell 2000 index declined.

Fixed income

• In anticipation of Federal Reserve easing, bond yields fell across all maturities, with the 10-year Treasury decreasing from 4.26% to 3.92% during the month.
• The yield curve inversion nearly ended in August, with the 2-year Treasury yielding just 3 bps more than the 10-year at month-end.

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.