April 2024 Economic & Market Highlights

April was a tough month for both stock and bond markets. A combination of hot inflation data and slowing first quarter GDP growth fueled market fears that interest rate cuts will be delayed. Increased geopolitical tensions in mid-April exerted pressure on major stock indices worldwide.
PCE, the Federal Reserve's preferred gauge of inflation, came in at 3.4%, above the target of 2%. U.S. GDP growth slowed to an annual rate of 1.6% in Ql 2024 from 3.4% in Q4 2023. The labor market remained strong, with nonfarm payroll employment increasing by 303,000 in March. Unemployment edged down to 3.8%, underpinning consumer spending.
The changing interest rate environment was particularly visible in interest rate-sensitive sectors, such as small caps. Bond markets also suffered from the change in rate expectations.
Despite the danger of escalation in the Middle East, emerging market stocks delivered positive returns.

Source: Morningstar-All performance is percentage change of total return

Past performance does not guarantee future results. One cannot invest directly in an index. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The Barclays Capital Municipal Bond is an unmanaged index of all investment grade municipal securities with at least 1 year to maturity. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The MSCI Emerging Markets is designed to measure equity market performance in 25 emerging market indices. The index’s three largest industries are materials, energy, and banks.

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