Market Recap: November 2024

Market commentary

• The Fed reduced its target rate by 25 basis points; however, economic conditions may persuade the Fed to slow the pace of easing versus earlier expectations.
• Inflation remains above Fed target levels, with the CPI and PCE measures rising slightly in November.
• November saw a rise in consumer confidence, which could be expected to positively impact future GDP growth.
• The U.S. labor market is expected to show signs of recovery in rebounding from a weak October.

Select economic and market data

Equities

• November was a strong month for U.S. equities, led by a nearly 11% gain by the small-cap Russell 2000 Index. Conversely, international markets struggled.
• Strong corporate earnings and expectations of favorable policies under the new administration buoyed optimism.
• Yet, concerns about economic headwinds and geopolitical pressures remain.

Fixed income

• Following a rate cut by the Fed, U.S. bond yields declined slightly in November. However, a robust economy and shifting expectations for future rate cuts have tempered bond market optimism.
• The yield curve remains very flat, with only 45 basis points separating the highest-yielding Treasury and the lowest.

Strategic outlook

• Some near-term caution warranted on equities, particularly in high-growth large-cap stocks following a period of significant outperformance; currently favoring small- 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.