Markets Start Second Half of Year in the Right Direction
July 22, 2024
By Samuel Richter, CFP®
Senior Securities AnalystStock market performance broadened thus far in July. Since the inflation report Krista discussed was released on July 11, market performance rotated. This is positive news for diversified investors. The recent broadening of performance reflects an increased confidence that inflation is cooling. The markets now believe the Federal Reserve is on track to begin cutting interest rates in September.
Market Confidence is Building
Below is a chart of performance for major market indices through the first half of the year. Equity returns were concentrated, yet positive. A handful of Artificial Intelligence (AI) focused technology stocks, such as Nvidia and Apple, largely drove performance year-to-date through June. In the second quarter, over 70% of the market’s return came from these two stocks. The S&P 500 outperformed other areas of the market due to its concentration in these technological growth stocks.
The next chart shows the difference in market performance to start the back half of the year. Some of the relative laggards in the first half of the year, such as small-cap and mid-cap, bounced back in July.
Overall, equity performance broadened to start the second half of the year. This rewards diversified investors. Portfolios we manage remain broadly diversified with a tilt towards value and quality. As Tom discussed in the mid-year outlook, we remain confident in our asset allocation as we continue into the second half of 2024. Please reach out to your advisor if you would like to discuss how broadening market performance impacts your portfolio. Your financial success matters to us!