Our Insights

Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Election Driven Rally Pushes US Equities Higher

Stocks traded higher this week, with most of the gains occurring after the election. The S&P 500 reached a new all-time high, nearing the key 6,000 level. The broader equity market rally was notable as investors priced in the Trump administration’s pro-growth, reflationary policies. The past few weeks have been packed with market-moving events, but the calendar is expected to settle down as we approach year-end.

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Monthly Client Letter Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Monthly Client Letter Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Treasury Yields Rise Following the Fed’s September Rate Cut

Stocks finished October lower as investors navigated Q3 earnings, the upcoming election, and uncertain Federal Reserve policy. Treasury yields climbed as investors considered the possibility that the Fed may not cut interest rates as much as previously expected. Concerns about fiscal spending also drove Treasury yields higher, with expectations for continued high government spending regardless of the election outcome.

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

The Next Two Weeks are Filled With Market-Moving Events

This week, stocks traded lower after several weeks of consistent gains. The S&P 500 dropped -0.5%, underperforming the Nasdaq 100's +0.3% gain but outperforming the Russell 2000's -2.8% return. The Magnificent 7 rose over +2%, making Growth the only factor to trade higher. The next two weeks are filled with market-moving events, and once they pass, stocks could rally into year-end.

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Tracking the Impact of the Fed's Rate Cuts on the Economy

This week, the S&P 500 reached a new all-time high, bringing its year-todate count to nearly 50. The index's gains were led by a unique combination of sectors, with Utilities, Financials, and Real Estate each gaining over +3%. The Magnificent 7 underperformed the index, with factor returns hinting at a market rotation.

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Chart of the Month Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Chart of the Month Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Uncharted Territory: Understanding This Economic Cycle

The economy is in uncharted territory. The Leading Economic Index (LEI), which tracks ten data points that tend to change before the overall economy does. Economists monitor the LEI because it includes data that can provide insight into future economic activity, such as unemployment claims, building permits, and manufacturing hours worked. A rising LEI signals improving economic conditions, while a declining LEI suggests worsening conditions.

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Recession Fears Fade on Strong Labor Market Data

Stocks ended the week slightly higher, driven by Large Cap Growth, while Equal-Weight, Value, and Small Caps lagged. Bonds traded lower as yields rose, with longer-duration bonds underperforming. Market sentiment remains volatile, with investors shifting between mega-cap growth stocks and this year's weaker performers..

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Quarterly Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Quarterly Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

3rd Quarter Recap and 2024 Outlook

In the third quarter of 2024, the Federal Reserve made its first interest rate cut of the cycle, reducing rates by 0.50%. This move was driven by rising unemployment, reaching a 33-month high, and inflation returning to target levels. Despite market volatility, including a sharp sell-off in August, equities finished the quarter higher. The S&P 500 achieved its fourth consecutive quarterly gain, approaching record highs by the end of September.

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

The Fed Kicks Off the Rate-Cutting Cycle

This week, investor confidence grew after the Federal Reserve's Federal Open Market Committee (FOMC) announced a significant 50 basis-point cut to short-term interest rates, lowering the federal funds rate to 4.75%- 5.0%. Chairman Powell hinted that the FOMC might initiate a series of rate cuts that could extend well into 2025, depending on economic conditions.

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Chart of the Month Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Chart of the Month Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Investing Based on Politics is a Bad Idea for Your Retirement Portfolio

As the 2024 presidential election approaches, Americans are preparing to vote in what polls forecast to be a tight race. Like many investors, you may wonder how the election outcome could affect financial markets and whether you should change your investment strategy. While elected leaders can influence economic growth by enacting laws and regulations, data suggests that who occupies the White House has little to no impact on investment performance.

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Stocks Bounce Back After a Volatile Start to the Week

The week started off volatile, but the S&P 500 finished higher, led by the largest stocks. Large Cap Growth, High Beta, and Momentum outperformed, while the Russell 2000, Large Cap Value, and Low Volatility underperformed. One notable theme in the past few weeks has been investors pricing in slower economic growth and aggressive rate cuts

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Key Takeaways from August's Market Volatility

This week, the stock market experienced heightened share-price volatility. Investors are grappling with numerous uncertainties, including the direction of Federal Reserve rate policies, persistent inflation, fluctuating employment figures, corporate earnings, and the impending presidential election results.

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Monthly Client Letter Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Monthly Client Letter Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Federal Reserve Set to Begin Cutting Interest Rates in September

Investors expect the Federal Reserve to start cutting interest rates at its next meeting on September 17th. Fed Chair Jerome Powell signaled the move at last month’s Jackson Hole conference by saying, “The time has come for policy to adjust."

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Previous Job Growth Estimates Revised Lower

Stocks traded higher early this week before giving back some gains on Thursday. It's been an impressive recovery in the equity market after the early-August volatility, with the S&P 500 less than -2% below its July 16th all-time high. This week’s gains were small with limited return dispersion, but there was a minor rotation underneath the surface.

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Stocks Rally as Risk Demand Rebounds

This week, the S&P 500 continued to trade higher following the recent market volatility. The index has reclaimed its 50-day moving average and improved its technicals from the early August low. This week, the market returned to its 1H 2024 regime.

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Chart of the Month Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Chart of the Month Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Long-Term Perspective:  Market Volatility is the Price of Admission for Investing

The stock market had a strong start this year. The S&P 500 gained over +15% in the first six months, its 16th strongest first-half return since 1931. The equity market’s rise continued into early July, and the index set a new all-time closing high on July 16th. However, the stock market experienced increased volatility as it traded lower over the past few weeks.

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

The Market Experiences a Big Deleveraging Event

This week, the market experienced significant deleveraging as it saw a decline in risk appetite: defensive sectors and gold outperformed. Stock and bond volatility spiked, but the credit market showed little sign of stress. We expect residual volatility in the near term as the market seeks a new equilibrium.

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Monthly Client Letter Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Monthly Client Letter Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

The Stock Market Experienced a Big Rotation in July

The S&P 500 Index returned +1.2% in July, underperforming the Russell 2000 Index’s +10.3% return. Ten of the eleven S&P 500 sectors traded higher, led by Real Estate, Utilities, and Financials. Technology was the only sector to trade lower, reversing a portion of its rise in the first half of 2024.

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

GDP Growth Rebounds During 2Q 2024

This week’s economic data from the Bureau of Economic Analysis (BEA) supports Wall Street’s anticipation of a “soft landing” for the U.S. economy, specifically a continued modest expansion and an avoidance of a recession. 

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Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA® Market Update Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

Large to Small Rotation Continues as Momentum Unwinds

This week's performance was similar to last week. The Nasdaq 100, Momentum, Growth, and Technology sector underperformed, while the Russell 2000, Value, and Equal Weight factors outperformed. We attribute the ongoing factor rotation to the slow momentum trade as interest rate cuts come into view.

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