Q2 2024 Market Commentary

In our Q4 2023 newsletter, we expressed optimism about the prospects for financial markets in 2024. The S&P 500 index exhibited remarkable resilience, surging by an impressive 10.15% in the quarter of the year, despite facing significant geopolitical challenges such as the conflicts in Ukraine, the Taiwan Strait, and the Middle East. However, early indications suggest a potential halt in the downward trend of US inflation. Additionally, there is a persistent concern regarding elevated stock market valuations, particularly when viewed from a long-term perspective. The P/E10 ratio, which measures the real price of the S&P Composite adjusted for inflation, currently sits at historically high levels, a trend that has historically been associated with heightened risk in the market.

While our outlook for U.S. equities in 2024 remains positive, we are proceeding with caution. As the bull market continues to unfold, we anticipate an uptick in volatility and will remain vigilant in monitoring market developments.

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