April 15, 2024 •Nathan Willis
Key Events: Inflation hits a bump
Inflation for March was higher than expected, driven by housing and gasoline costs. The minutes of the January FOMC meeting showed the Fed remains concerned about inflationary pressures, as did statements by Fed officials.
Tensions continue to boil in the middle east, keeping energy prices high.
Market Review: Interest rates drive stocks again
After a first quarter driven by hopes for a soft landing, April has seen the bond market firmly in charge.
Higher rates, caused by lower rate cut expectations, drove stock losses, with rate-sensitive small caps losing the most.
Outlook: Maintaining discipline, focusing on what matters
Last week we cautioned investors about the risk of trying to time the market March Madness and investing.
The advice holds; markets have been hurt by inflation, but disinflation remains the trend. We prepare for a spike in inflation or a recession; portfolios have allocations that will benefit in each scenario if a soft-landing does not occur.
Expanding on our theme of avoiding market timing, we turn to the election. Stock market performance between now and the election will likely influence the outcome, rather than the election driving returns. As the chart below shows, a strong stock market - and Economy - tends to mean the incumbent party will remain in power (Higher inflation tends to be associated with a change). We advise to avoid making decisions based on the election.
Use this link to sign up for our quarterly webinar on Tuesday to hear more Quarterly Market Update Registration.
Stock Markets and the Election [1]
Navigator Outlook: April 2024
This material is intended to be educational in nature,[2] and not as a recommendation of any particular strategy, approach, product or concept for any particular advisor or client. These materials are not intended as any form of substitute for individualized investment advice. The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisors. OneAscent can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.
[1] Source: Business Insider, Strategies Research Partners businessinsider-sp-500-us-election-winner
[2] Source: Market Returns reference the following indices: Large Cap – S&P 500, Mid Cap Growth – Russell Midcap growth, Mid Cap Value – Russell Midcap Value, Small Cap – Russell 2000, Developed – MSCI EAFE, Emerging – MSCI Emerging Markets, Aggregate – Bloomberg US Aggregate, High Yield – Bloomberg High Yield
OAI00706