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.

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.

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.

The stock market had a strong start in the first half of 2024. We review the S&P 500’s year-to-date return against its average annual return path since 1931.

NVIDIA has gained almost +170% year-to-date and recently surpassed Apple as the second biggest S&P 500 holding. Due to its high index weight and strong return, Nvidia has contributed 33% of the S&P 500 Index’s year-to-date return

Ten months have passed since the Federal Reserve last raised interest rates. The pause in rate hikes follows a 17-month period where the central bank raised interest rates by +5.00%. In this month’s charts, we explore what is preventing the Federal Reserve from cutting interest rates.

The Institute of Supply Management (ISM) conducts a monthly survey that focuses on the manufacturing industry. The survey shows the New Orders index climbed above the key 50 threshold in January 2024, the first time in 16 months. The rise above 50 indicates that manufacturing activity may be starting to expand again, but it also provides insight into corporate earnings.

You have likely seen headlines and news reports discussing artificial intelligence as a major technological advancement. Two notable themes emerge: (1) companies have been discussing AI for over a decade, and (2) the recent number of mentions around AI is slowing.

The US unemployment rate is currently 3.7%, which is low compared to historical standards. This is notable considering that during the past two years, the U.S. economy experienced one of the sharpest rises in interest rates on record. Why does the unemployment rate remain low today?

In December 2023’s edition of the University of Michigan Survey of Consumers, there was notable development as the percentage of consumers expecting lower interest rates over the next 12 months rose to nearly 30% from 12% the prior month.

The Federal Reserve has raised interest rates by more than 5% since March 2022. It has been the fastest pace of tightening in decades, but data shows the economy has been resilient thus far. The U.S. economy grew at a 5.2% annualized pace in the third quarter of 2023.

As we approach the end of the year, investors with significant capital gains or losses may consider a tax-loss harvesting strategy. Tax-loss harvesting offers tax advantages, but there are special considerations.

The U.S. consumer plays an important role in the economy, accounting for almost two-thirds of U.S. GDP. However, consumer spending has steadily trended lower since July 2022, with the Johnson Redbook Index experiencing a relatively rare year-over-year decline in July 2023.

Investors can earn income in one of two primary ways – dividends paid on stocks or interest paid on bonds. As of July 11th, only 51 companies in the S&P 500 paid a dividend yield above the yield on a 5-year Treasury bond.

Rent vs. buy – it is a big question with significant financial implications. This month’s chart, which tracks year-over-year growth of monthly rent and mortgage payments since the early 1980s, compares the cost of renting vs. buying a home.

More than 90% of S&P 500 companies have reported Q1 2023 earnings, with results exceeding expectations, with 78% reporting Q1 earnings that surpassed their estimates.

Fewer container imports indicate the economy is reverting to pre-pandemic norms. This drop could help alleviate supply chain bottlenecks and ease inflationary pressures, a positive development after inflation rose to a 40-year high during the pandemic.

During the pandemic, businesses and individuals flooded banks with new deposits. As the Fed raises interest rates and customers look for higher yields, the banking industry is under considerable pressure.

In the past two years, the U.S. consumer has been a big part of the country's strong economic growth. Rising wages, multiple fiscal stimulus checks, and easy access to cheap credit have helped.

Today international stocks currently trade at more attractive valuations than U.S. stocks after a decade of underperformance.