2024 Economic and Investment Outlook
A Long and Winding Road
Looking ahead to 2024, recession risks remain significant due to tighter monetary policy effects, consumer and business pressures, and geopolitical tensions. The Fed has shifted to a more dovish stance, signaling an end to its aggressive inflation battle.
Market Commentary
Monthly Market Commentaries identify recent drivers in the capital markets. Each commentary is authored by a member of Innovest's Research Team.
November 2024
In November, air travel volume continued setting records due to Thanksgiving travel. A record 3.08 million travelers took to the skies on the Sunday after Thanksgiving, beating the previous record of 3.01 million set in July. Strong air travel has been complimented by the resiliency of consumer spending, which emphasizes the continued strength of the American consumer.
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October 2024
U.S. equity markets saw a slight decline, with large cap stock funds down 0.91% for the month, though year-to-date gains still held strong at 14.9%. Disappointing earnings from major tech companies, which led to a 2.8% drop in the Nasdaq on October 31, contributed to the downturn.
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September 2024
Domestic equity markets continued their upward trend in September and posted more record highs. The consumer discretionary sector led the way, gaining 7% in September. Utilities followed closely behind, gaining 6.4%. Financials, healthcare, and energy were the only sectors to post negative returns for the month.
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August 2024
At the beginning of August equity markets experienced volatility as the S&P 500 declined 6.1% in the first three trading sessions of the month. On August 5th, the VIX (the CBOE Volatility Index) touched 65 early in the day, its highest reading since 2020. The main cause of the spike appeared to be the unwind of a long-executed carry trade utilizing the Japanese Yen.
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July 2024
U.S. GDP rebounded in the second quarter of the year. After growing at only a 1.4% rate in the first quarter, the U.S. economy outpaced expectation, posting a 2.8% growth rate. Consumer consumption contributed 2% with a rise in inventories marking a significant contributor, diminishing fears that consumer demand had begun to stagnate.
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June 2024
Domestic equity markets continued their upward trend with the S&P 500 posting new record highs in June. AI-related tech companies spurred the majority of this growth, with Nvidia accounting for 30% of the S&P 500’s total return as of June 28th, 2024. This rising tide has not lifted all ships, however, as many non-tech companies in the S&P 500 continue to lag the index.
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May 2024
Domestic equity markets remained strong in May, with the S&P 500 posting new record highs. Growth stocks continue to outperform value stocks and large cap stocks continue to outperform small cap stocks. Trading volumes in GameStop (NYSE: GME) have surged again.
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April 2024
U.S. hiring slowed in April, with employers adding 175,000 jobs compared to the projected 240,000 jobs forecasted by economists. Unemployment ticked up to 3.9% from 3.8% in February. The less-than-expected jobs growth invites speculation as to whether the labor market is cooling under the strains of higher interest rates.
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March 2024
Domestic equity markets continue to rally, with the S&P 500 returning 3.22% in March. The U.S. economy remains resilient and has led to positive performance in nearly every S&P 500 sector. Mega-cap tech companies, however, still lead the broader market.
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February 2024
Domestic equity markets had a strong month, with the S&P 500, NASDAQ, and Dow Jones Industrial Average hitting new all-time highs. Large cap technology companies, notably AI-adjacent companies, continue to drive the performance of the indices, with NVIDIA reporting stronger than expected earnings and continuing its rally.
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January 2024
The S&P 500 Index started 2024 up 1.68%, posting new all-time highs on six different occasions throughout the month. The continued rally was driven primarily by strong earnings from mega cap technology companies, with Meta tripling its profits from January of last year, resulting in a 20% surge and an additional $200 billion in market cap.
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December 2023
The S&P 500 Index finished 2023 up 26.29% on the year, and up 4.54% in December alone. Domestic equity markets rallied into the end of the year, fueled by optimism about the shifting sentiment of the Fed, cooling inflation, a resilient labor market, and robust consumer spending.