FMI - MARCH 2024 NEWSLETTER

FMI MARKET UPDATE

Overcast skies prevented Punxsutawney Phil from seeing his shadow, so we anticipate spring to be right around the corner! With the unseasonably warm temperatures of late, I’d say he’s probably right. If only Phil could also predict the Fed’s rate decisions, we’d be in business. Higher-than-expected inflation data and a knock-out Job-Openings report for December caused the Fed to leave rates unchanged at their meeting on January 31. The market’s immediate response, while negative, was short-lived, even after more higher-than-expected inflation data was released for the month of January. Year-to-date, the S&P 500 index is up over 6% and continues to test record highs fueled by advances in AI applications and high levels of consumer confidence. The tech-heavy NASDAQ Composite index is up nearly 7% as well. Production cuts and tighter supply have caused crude oil to spike nearly 10% so far this year, hovering near $79/bbl.  Bitcoin, likewise, has experienced a gold-rush style run-up on the heels of the spot Bitcoin ETF offerings being approved by the SEC. While it is up nearly 30% since January 1, it has seen price-appreciation of around 120% since the run up began in October of 2023.

More economic reports will come out before the next Fed meeting on March 19-20, but as of this moment, it is likely that the Fed will leave rates unchanged. Still, the market expects the Fed to cut rates by at least 75bps before the end of the year. If inflation and employment data lag expectations, it could certainly be more than that. FMI remains confident in the long-term efficiency of the market. If you have questions about your account, please reach out to your advisor.