Market & Economic Summary 4Q–2024

Leading by Example: US Markets Shine Again

The S&P 500 surged 25% in 2024, outpacing global peers, with growth stocks more than doubling the returns of value stocks. Highlights included Nvidia's remarkable +171% gain and the continued dominance of the "Magnificent Seven" tech giants. 

US valuations have risen significantly over the past couple of years, now well above the 30-year average. While this signals optimism in the US market, it is also a function of the increasing weight toward the faster-growing, more expensive tech and consumer-oriented sectors of the market. 

Interest rates at the short end of the yield curve (less than 2 years) dropped, while those further out rose, reducing total returns for intermediate and longer-term bonds. 

The economy is showing signs of softening, given the rise in the unemployment rate and credit delinquencies, decelerating job gains and real retail sales, as well as a contraction in the manufacturing and housing sectors. The bright spot continues to be the progress being made at the core of the inflation battle, but markets remain skeptical the flames of inflation will be fully extinguished by the Fed anytime soon.

How concerned should investors be about the market being more expensive than average?

How expensive are international markets?

How did alternative investments perform?

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