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Market Updates

2024 Q1 Economic and Market Overview


Equity markets rose in the first quarter despite a sharp rise in bond yields. Equity leadership was rather narrow in the technology sector after broadening in November and December of last year. The rise in interest rates has been driven by inflation trends that have remained stickier than expected, which has pushed out the timing of Fed rate cuts. Read the full report.

2023 Q4 Economic & Market Overview


Markets surged in Q4 as the Fed pivoted interest rate policy by indicating the end of the rate hike campaign. This sparked a sharp rally in both stocks and bonds. Notably, small caps, as measured by the Russell 2000 Index, led the charge increasing by 14.0% in Q4. The S&P 500 added 11.7%. Bonds, as measured by the Barclays Aggregate Index, rose 6.8%. Read the full report.

2023 Q3 Economic & Market Overview


September lived up to its reputation of being one of the most challenging months for investors from a seasonal perspective with the S&P 500 falling by -4.8%. The third quarter was negative for all asset classes except for commodities, which rallied modestly on the back of oil supply cuts from Saudi Arabia. Most asset classes are largely unchanged year-to-date as shown in the chart below. The 7 largest stocks in the market capitalization weighted S&P 500 comprise a very high, unusual 35% concentration of the index and have an average Price to Earnings ratio (P/E) of around 50x. This compares to the Small Cap P/E of around 11x (see page 3 Small Cap Valuation Graph). S&P 500 index concentration obscures what is happening beneath the surface as evidenced by the equally weighted S&P 500 being flat on the year. While timing is difficult, we continue to anticipate a "buy the laggards" trade that will meaningfully benefit our strategic allocation to small and mid-cap value-focused equities. A peak in interest rates is a catalyst for this inflection to occur. Read the full report.

The opinions expressed are those of Socium Advisors as of the date of publication and are subject to change. There is no guarantee that any forecasts made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment or security. Please remember that all investments carry some level of risk, including the potential loss of principal invested. Indexes and/or benchmarks are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance and are not indicative of any specific investment. Diversification and strategic asset allocation do not assure profit or protect against loss.