Monthly Market Update (January 2024): 3 Things You Need to Know

by | Feb 5, 2024 | Wealth Management

The resilience of the U.S. economy will likely be a continuing theme in the months to come, as will be the Fed’s timing (the Fed elected to hold interest rates steady at the first Federal Open Market Committee meeting of the year on January 31st). Here are 3 things you need to know:

  1. The S&P 500 recorded new highs and was up +1.59% in January. The Magnificent 7 accounted for 45% of the January return but without Tesla’s -24.63% decline, they would have accounted for 71% of the return. (Source: S&P Global)
  2. The downturn in China’s real estate market, already the longest on record, is accelerating. The Hang Seng declined -9.2% (in USD terms) in January. China took their first meaningful step to ease monetary policy with a 0.50% reserve ratio requirement cut and there is a rumor of a 2 trillion-yuan stimulus plan.
  3. U.S. regional banks sold off at month-end after New York Community Bancorp (NYCB) reported increase stress in its commercial real estate portfolio, renewing fears about the industry’s health.

Sources: J.P. Morgan Asset Management – Economic Update; Bureau of Economic Analysis (www.bea.gov); Bureau of Labor Statistics (www.bls.gov); Federal Open Market Committee (www.federalreserve.gov); Bloomberg; FactSet.

Indices:

  • The Bloomberg Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
  • The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
  • The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries.  The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
  • The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

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