Q4 Newsletter - 2024
Welcome! Here is what your local STP Raymond James advisors are watching here in Q42024.
Interest Rates Decreasing, For Now:
In eight out of the last ten rate-cutting cycles, the market ended up being higher 12 months later. While volatility the price we pay to be investors, please see below.
The question remains, does inflation re-accelerate because of policy in six to nine months? That’s something that we’re watching very closely.
Politics and Inflation – via the Bureau of Labor Statistics:
In the last 20 years, with the biggest federal government ever, real growth has slowed to just 2%. If you want to understand what this means, at 4% growth we double every ~18 years, at 2% growth it doubles every ~36 years.
Stock Market Leadership Remains Narrow:
Top heavy performance is not all that uncommon in the S&P500 index. Historically this upward trend persists for decades.
The bigger the government gets:
In the last 20 years, with the biggest federal government this country’s ever had, real GDP growth has slowed to just 2%.
If you want to understand what that means:
- At 4% growth, we double every ~18 years
- At 2% growth, we double the economy every ~36 years
International opportunity:
In the last 3 years many big institutions have made calls for International stocks to outperform the United States and that has failed to be realized but this chart shows the cyclicality of this relationship since 1975.
Disclosures: Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgement of the authors and are subject to change as the data changes. There is no assurance the trends mentioned will continue or that the forecasts discussed will be realized. Past performance may not be indicative of future results. Diversification does not guarantee a profit nor protect. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australasia and Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 is an unmanaged index of small-cap securities. Investing in smaller, newer companies generally involves greater risks and may not be appropriate for every investor. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. An investment cannot be made in these indexes. The performance mentioned does not include fees and charges, which would reduce an investor’s returns. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Companies engaged in business related to the technology sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. U.S. government bonds and Treasury notes are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury notes are certificates reflecting intermediate-term (2 - 10 years) obligations of the U.S. government. The Consumer Price Index is a measure of inflation compiled by the U.S. Bureau of Labor Studies. Material created by Raymond James for use by its advisors. CDs are insured by the FDIC and offer a fixed rate of return, whereas the return and principal value of investment securities fluctuate with changes in market conditions. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material and does not constitute a recommendation. Raymond James is not affiliate with nor endorses Mitch Zacks.