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Articles From Lumsden McCormick

Avantax Market Update - May 2024

In the May 2024 market update, Ivan Gruul, co-chief investment officer with Vanax, discusses the performance of various stock indices and bond markets. He notes that while the S&P 500 and Russell 2000 saw declines in April, the MSCI EPHA index fell less, and Emerging Markets experienced gains, largely due to China’s strong performance. Despite recent drops, the S&P 500 remains up year-to-date, whereas small-cap stocks have been negatively impacted by higher interest rates. Bond returns were negative in April due to rising interest rates, with municipal bonds outperforming taxable bonds. The video also addresses inflation and interest rate expectations, suggesting that slowing wage growth and stable supply chains will help inflation continue its descent towards the Fed’s 2% target. Lastly, it highlights opportunities in bonds and international stocks, emphasizing the potential for profit growth and attractive valuations.

Highlights:

  • Stock Market Performance
    • S&P 500 and Russell 2000 saw declines in April
    • MSCI EPHA index fell less, Emerging Markets gained
    • S&P 500 still up year-to-date, small-cap stocks affected by interest rates
  • Bond Market Performance
    • Rising interest rates led to negative returns in April
    • Municipal bonds outperformed taxable bonds
    • Both remain negative year-to-date, but municipal bonds fare better
  • Inflation and Interest Rates
    • Disinflation has stalled, raising concerns about reaching the Fed’s target
    • Decreases in shelter and auto insurance prices, stable supply chains, and slowing wage growth should aid in reaching the target
    • One rate cut predicted for 2024, aligning market expectations with the Federal Reserve
  • Investment Opportunities
    • Bonds offer income and diversification, with potential for price appreciation as rates decline
    • US earnings and profit margins rebounding, supporting diversified market opportunities
    • International markets present timely opportunities for investors to diversify abroad

Watch the May 2024 Market Update on YouTube.

Avantax Market Update - May 2024

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Jeff has been in the financial services industry for over 20 years. He is a Certified Fund Specialist® from the Institute of Business and Finance and has passed his SIE, Series 6, 7, and 63 exams as well as holding Life, Accident, and Health insurance licenses. He is experienced in qualified plan design as well as custom income strategies and cash flow. Jeff also has significant experience with insurance planning as a strategy to protect wealth and future generations. Jeff has studied modern portfolio theory, which is vital to efficient portfolio modeling, allowing for mean-variable analysis with a mathematical framework that is consistent with individual risk factors. 

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