CIO Insights

Tempus fugit. An apt Latin reminder that time is fleeting. With the first half of 2024 already in the books, the year is flying by, and equity investors have thus far been rewarded with solid gains. All but one of the major indices (microcaps) were in the black for 1H, with the NASDAQ and S&P500 leading the way, lagged by the Dow and Russell 2000.

May was a solid month for equity markets, rebounding from a weak April to close in the black for the fourth month out of five this year.

Indisputably, the weather affects mood, and the mood amongst investors in April was gloomy and downbeat. Equities endured a tough start of quarter, with the S&P500 posting both its first monthly decline of 2024 and its first 5% pullback in 6 months. 

Coming off a robust quarter to conclude 2023, US equities rode the momentum to a series of new all-time highs in Q1, delivering the strongest start to a year since 2019. 

The rally rolls on. Hard. Statistically, February is a challenging month, but this go ‘round the bulls defied the odds to end squarely in the green.

After a strong rally to conclude 2023, the new year rang in with a more cautious tone as small caps slid and large caps led. Stocks have now rallied for the third straight month, marking the longest streak since August 2021

Following a tumultuous and disappointing 2022, we faced a fork in the road in terms of what would lie ahead in 2023: a recovery and rally to claw back some or all the previous year’s losses or a continuation of the pain and tough times.

We don’t always know what the markets want, but we do know that the more easing they come across, the less problems they see. 

Stocks and bonds mutually declined for a third consecutive month, continuing on the zigzag, downward path that they each have been travelling since mid-July. After five months of spring and summer gains, both the S&P500 and NASDAQ have now dropped more than 10% from their highs, an ignominious achievement that lands both indices squarely in correction territory.

Seasonal weakness. The September Effect. These terms are often used in connection with late summer, during which we historically have experienced the worst-performing months of the calendar (over the last 50 years or so). Just like the weather, market performance has its own “seasons” which are sometimes predictable and repeatable, and September is the only month in the year with a negative average return. This year was no different.