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March’s Economy & Stock Market Update

March’s Economy & Stock Market Update

The stock market is off to a strong start, adding on to the late 2023 rally.  Through March 8, the S&P 500 is up over 7%.  The equal-weighted S&P 500, which might be a better measure of the average stock, is up nearly 5% and the Dow Jones Industrial Average is up a bit more than 3%.  Like last year, the market is top-heavy, with a few stocks accounting for an outsized portion of the gains.

There are signs that the performance is starting to even out, however.  Some of the big technology stocks that did so well last year have pulled back a bit recently, while other “under the radar” names are catching up.  In my mind, that is a healthy development for most investors. 

The 10-year US Treasury bond yield is up from the end of 2023, although it has pulled back from February highs.  Short-term rates are nearly flat as bond traders wait for more signals from the Federal Reserve about interest rate cuts.

The market of stocks, bonds, and just about everything else really had strong performance in late 2023 as investors were planning on early 2024 interest rate cuts by the Fed.  Economic news has come out in 2024 indicating that the economy is very strong, which has pushed back hopes for an interest rate cut until mid- or late 2024.  That is still our base case–that the Fed will start to reduce its rate this year.  We are becoming more and more hopeful of a “soft landing,” wherein the economy slows but doesn’t stall.  This would be an ideal scenario for the economy, consumers, and stock investors.  There may be a “scare” along the way that growth is too hot, resulting in a market pullback.  We’ll reevaluate then, but it might present a great opportunity to add to stock investments. 

For now, my indicators are neutral.  There are more positives than negatives, but the market has priced that in.  I recommend that investors stay allocated in-line with their financial plan recommendation.  Don’t be alarmed by “weapons of mass distraction,” as Chip likes to say.  We all will likely get bombarded by TV news, ads, and robocalls ahead of this year’s election, and I doubt that many of the messages will be positive.  Good news doesn’t sell well.  I also advise that investors don’t let their own political views distort their investment decisions.  Remember that the plans we put together are based on decades of data and account for many different political environments.  Furthermore, recent stock market performance has shown that stocks can be resilient through all sorts of regimes.

March 29 is Good Friday and a stock market holiday, so many advisors will be taking the day off.  Very importantly, tax returns are due on April 15.  If you plan to make a 2023 contribution to an IRA, SEP, or 529 plan, time is running out.  Also, almost all tax reports have been mailed out to our clients.  There are still some stragglers (we have to wait for companies to provide information to us before we can send it to you), but if you find that you are missing anything, please let us know. 

As always, these opinions are mine, and may or may not be the same as those of Raymond James.  This is not a solicitation to invest, although we do invite you to review your portfolio with us to see if any changes should be made.  
Past performance may not be indicative of future results. There is no assurance any of the trends mentioned will continue or forecasts will occur.  Investing involves risk including the possible loss of capital. Asset allocation and diversification do not guarantee a profit nor protect against loss.  There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise.
The forgoing is not a recommendation to buy or sell any individual security or any combination of securities. 
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Individuals cannot invest directly in any index.   The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal.  The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system.  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.   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.  Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. 
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Scott Mitchell and not necessarily those of Raymond James.  Expressions of opinion are as of this date and are subject to change without notice.  Raymond James does not provide tax or legal services.  Please discuss these matters with the appropriate professional
Scott Mitchell
Scott Mitchell
, AIF, AAMS
Chief Investment Officer
Senior Wealth Advisor, RJFS 
Scott Mitchell is the chief investment officer of Signature Wealth, a growing wealth management community serving financial advisors, their teams, and their clients throughout the Southeast. He leads the investment management team and works to determine the best portfolio strategies for clients across 15 locations. A cum laude graduate from the Wake Forest University School of Business, Scott has also pursued further specialization with the Accredited Asset Management Specialist™ and Accredited Investment Fiduciary® designations from the College of Financial Planning. He began his career in finance at Southern National Bank, then joined his father at First Union Securities for six years. In 2015, he and his partners founded Signature Wealth, now having driven the group's expansion from a small three-person team to a regional wealth management group with 45+ team members. Scott lives with his wife and two children in Florence, where he devotes much of his time to community organizations. He is a past president of St. Luke Lutheran Church and a past president of the Florence Rotary Club. He serves on the Boards of the Pee Dee Youth Mentors. Scott enjoys playing golf and watching Wake Forest sports in his spare time.

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