Perspectives Newsletter: Q1, 2024
With a strong March finish, the S&P 500 notched its 11th best start to a year since 1950. While there are indications of elevated investor expectations (always a warning sign) as the calendar turns to the seasonally weaker second quarter, history tells us to not fear the market just because it is higher. In past years that began like this one, the tendency has been for positive returns through the rest of the year, with generally modest corrections along the way. Might market leadership repeat the 2022/2023 pattern of flip-flopping changes between value and growth stocks? While growth stocks beat value for the full three months, value more than doubled growth in March. Further, on an equal weighted basis, the Technology sector (the undisputed leader for months) lagged Materials, Energy, Industrials and Financials in the quarter. While international stocks broadly trailed U.S. stocks, one standout was Japan where a continuation of their bull market finally allowed the Nikkei to hit a new high for the first time in 34 years! On the other end of the spectrum, investments in China continued to erode investors’ returns as the market there was down over -2%. Domestically, small and midcap stocks had respectable showings in the quarter but still trailed their larger peers. In the more speculative corners of the market, whether it be fundamental, technical, liquidity or safe haven driven, Bitcoin roared higher, hitting its own all-time high in early March.
