facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast blog search brokercheck brokercheck
%POST_TITLE% Thumbnail

February 2024 - Market Commentary

Multiple Stock Market Indices Set New All-Time Highs in January 

Monthly Market Summary 

  • The S&P 500 Index gained +1.6% in January, while the Russell 2000 Index traded down by -3.9%. Five of the eleven S&P 500 sectors traded higher. Communication Services, Financials, and Health Care each outperformed the S&P 500, while Real Estate, Consumer Discretionary, and Materials traded lower.
  • Corporate investment-grade bonds produced a -0.4% total return as Treasury yields rose, slightly underperforming corporate high-yield’s +0.1% total return. 
  • International stocks traded lower and underperformed U.S. stocks. The MSCI EAFE Index of developed market stocks returned -0.5%, while the MSCI Emerging Market Index traded lower by -4.5%.

Stocks Trade Higher in January, Propelled by Continued Mega-Cap Strength

Stocks traded higher to start the new year, with the S&P 500, NASDAQ 100, and Dow Jones Industrial Average each setting new all-time highs. In continuation of last year’s trend, the companies with the biggest market caps accounted for a substantial portion of the early-year gains. This leadership can be seen in the January returns of various factors, including the Russell 1000 Growth’s +2.4% return and the NASDAQ 100’s +1.8% return. In contrast, smaller companies traded lower, with the Russell 2000 underperforming the S&P 500 by -5.5%. Bonds produced flat returns after a robust Q4, when Treasury yields fell in anticipation of rate cuts by the Federal Reserve. When could the first interest rate cut arrive? The section below provides an update on monetary policy after the Federal Reserve’s January meeting.

Federal Reserve Pushes Back the Timeline for Interest Rate Cuts

The Federal Reserve held interest rates steady at its January meeting and hinted that rate hikes are finished for the current tightening cycle. While both actions were expected, the post-meeting statement confused the market. The central bank stated that it wants further confirmation that inflation will return to the 2% target before cutting interest rates. Investors were surprised by the statement after seeing inflationary pressures ease over the past six months and assuming interest rates didn’t need to stay at current levels. What more does the Fed want to see? Fed Chair Powell wasn’t clear, although he reiterated that inflation is moving in the right direction. 

The future path of interest rates remains uncertain after the January meeting and press conference. The Fed’s statement provides it with maximum flexibility to adjust monetary policy as needed, cutting rates if inflation continues lower but keeping rates at current levels if inflation proves stickier than expected. What is clear is the Fed’s desire to cut interest rates this year as a proactive measure to support the economy. It’s simply a question of when and by how much the central bank will cut interest rates. Investors and economists have been anxiously awaiting the Fed’s next steps, but it appears they will be waiting for at least a few more months.

Source: Market Desk

SEC Registration does not imply a certain level of skill or training.

The information provided herein is for general informational purposes only and is intended for your personal use and should not be circulated to any other person without our permission and any use, distribution, or duplication by anyone other than the recipient is prohibited. No portion of this commentary is to be construed as an offer or solicitation to buy or sell a security, or the rendering of personalized investment advice. The views and strategies described herein may not be suitable for all investors and are subject to investment risks. The content is developed from sources believed to be providing accurate information. The information contained herein should not be relied upon in isolation for the purpose of making any investment decision. 

We believe the information contained in this material to be reliable and have sought to take reasonable care in its preparation and conducted reasonable due diligence to ensure the third parties’ performance is not materially inflated or incorrect; however, we do not represent or warrant its accuracy, reliability, or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. We do not make any representation or warranty regarding any computations, graphs, tables, diagrams, or commentary in this material which are provided for illustration/ reference purposes only. These views, opinions, estimates, and strategies expressed in it constitute our judgement based on current market conditions and are subject to change without notice. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. 

Data which may be found in this document is based on our research and should not be taken as a forecast or an estimate of likely future returns. Any reference to a market index is included for illustrative purposes only, as an index is not a security in which an investment can be made.   

Investments involve some sort of risk including potential loss of principal; diversification alone cannot guarantee against loss. Any projected results and risks are based solely on hypothetical examples depicted. Forward-looking statements should not be considered guarantees or predictions of future events. More complete information is available, including product profiles, which discuss risks, benefits, liquidity, and other matters of interest. The value of any investment may fluctuate as a result of market changes. Past performance is no guarantee of future results, and there can be no assurance the investment strategies discussed herein will prove profitable. 

All opinions, estimates, investment strategies and views expressed in this document are subject to change without notice information. The recommendations made for your customized portfolio may differ from any asset allocation or strategies outlined in this document. Benchmark Financial does not guarantee the future performance of any portfolio, guarantee any specific level of performance, or guarantee any strategy or overall management will be successful or that the client’s investment objectives will be met.

Benchmark Financial is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. Investment Advisory Services offered through Benchmark Financial Wealth Advisors LLC, an SEC Registered Investment Advisor. Insurance services offered through Benchmark Financial Insurance Advisors LLC. The Benchmark Financial Wealth Advisors ADV Form 2A, 2B & Form CRS, which describe the services offered, fees charged and any conflicts of interest, are available upon request or online at www.bfllc.com. Additional information about Benchmark Financial and our advisors is also available online at https://adviserinfo.sec.gov/firm/summary/287966.