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Taking Stock: Executive Summary March 31, 2024

Quarterly Executive Summary

Q1 2024 was a welcome change.  It has been a long time since we began a new year with as much collective optimism as 2024.   We would need to go pre-COVID to find such a rosy global economic outlook.  Not surprising, given COVID-19 caused the worst global recession since the Great Depression -- about three times worse than the global financial crisis of 2008 (in terms of annual Gross Domestic Product decline).  And it was painfully obvious from the get-go that the global economy’s ascent back to pre-pandemic “normal” would be a long and difficult road, marked with obstacles and prone to setbacks.  

It has been four long years, but the global economy “is showing surprising resilience” according to the chief economist of the International Monetary Fund (IMF) in a recent press briefing.   The IMF increased its global growth forecast noting that, despite several downside risks, the global economy appears to be heading for a “soft landing.”  

Domestically, the specter of a recession has loomed for some time; however, the U.S. seems to have dodged that bullet -- no small task considering the headwinds we refer to quarter after quarter.  And yes, challenges remain … inflation is falling, but not nearly as quickly as hoped, and the Fed hasn’t cut interest rates as soon or as often as expected.   Short and long-term geopolitical concerns abound.  And our national debt is growing at a rate that is simply not sustainable. 

But, back to that optimism …  The first quarter of 2024 was off with a bang, as stocks continued to rally.  Even diminished rate cut expectations couldn’t keep equities from pushing higher.   Economic data, generally positive, indicates continued resilience, with stable economic growth, decreasing inflation and upcoming Fed rate cuts.  And earnings continue to grow, with analysts expecting 2024 to bring double-digit growth in S&P 500 earnings.

No doubt this has been an unprecedented time. In 2020 it was hard to imagine where we would be four years post-pandemic.   Those were scary days, and the only thing certain was uncertainty. Yet here we are, on the other side … what a long, strange trip it’s been!

A look back:  An excerpt from our Q1 2020 Executive Summary.  

We are confident that in time markets will return to previous highs. …  Stay focused on long-term goals with the understanding that “this too shall pass.”   Stick to the plan … remember that you have laid a solid foundation and are working toward a goal, proactive and not reactive.  

And as always, we are here for you.  Together we can ride out this storm, united in hope, emerging different, but perhaps better. 

Sometimes the lights all shining on me.  Other times I can barely see.

Lately it occurs to me.  What a long strange trip it's been.”

 - The Grateful Dead


Recent Economic Data: 

Gross Domestic Product (GDP).  The GDPNow model estimate for real GDP growth in Q1 2024 is 2.9% (seasonally adjusted annual rate; estimate released April 16, 2024) – down from 3.4% in Q4 2023.  A growth rate between 2% and 3% is commonly considered “normal.” 

Unemployment.  Total non-farm payroll employment rose by 303,000 in March, and the unemployment rate was at 3.8%.   The U.S. labor market has shown remarkable resilience despite elevated inflation and high interest rates, with unemployment holding steady (rates have been between 3.7% and 3.9% since August 2023). 

Consumer Confidence.  The Conference Board Consumer Confidence Index, an indication of consumer attitudes and buying intentions, was 104.7 in March, falling from 110.7 after December 2023’s surge (1985=100).  

Consumer Price Index (CPI).   The CPI for All Urban Consumers (CPI-U), a measure of inflation which shows “cost of living” fluctuations, was 104.7 in March 2024.  Over the last 12 months, the CPI-U increased 3.5% before seasonal adjustments, a continued decline from 5.0% for the 12 months ending March 2023.   

Earnings.  On March 31, 2024, the estimated (year-over-year) earnings growth for the S&P 500 was 3.4%.  However, based on historical earnings revisions, the index is expected to report year-over-year earnings closer to 7%.  

Housing.  Privately-owned housing starts in March 2024 were at a seasonally adjusted annual rate of 1,321,000, 4.3% below March 2023.  High mortgage rates and low inventory continue to challenge the housing market.  As mortgage rates begin to decline in the latter part of 2024, we expect a slight recovery. 

IndexMarch 31, 2024Q1 Return
S&P 5005,254.3510.16%


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 Executive Summary Sources:


















The views expressed represent the opinion of Asset Management Financial Solutions, Inc. (“AMFS”) and are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and AMFS’s view as of the time of these statements.  Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties.