April 30, 2024 - Here are five key takeaways from our first-quarter market update:

  1. CAPITAL MARKETS: HighGround's Capstone Fund posted positive returns for the quarter and exceeded its benchmark on a 1- and 3-year basis.
    • Global markets diverged during the quarter as equity markets continued to advance, whereas yields on sovereign bonds rose as investors recalibrated expectations for the timing of policy rate cuts in major developed markets.
    • Due to the relative strength of the U.S. economy, the U.S. dollar rose against most currencies during the quarter, gaining 3.2% (ICE U.S. Dollar Index) as the dollar strengthened considerably against the yen (+6.8%) and euro (+2.2%). 
    • For the quarter, the "Magnificent Seven" technology stocks (+12.1%) continued to be the best performing and largest contributor to returns, as stocks exposed to AI-related technologies continued to experience large gains. 
    • The S&P 500® set 22 all-time highs during the quarter, the first since January 2, 2022, while the Nasdaq Composite also reached its first record high since 2021, reflecting strong returns and earnings growth for technology stocks.
    • U.S. equities (Russell 3000®), for the second consecutive quarter, experienced double-digit gains, with a return of +10.0%.

  2. U.S. ECONOMIC GROWTH: U.S. economic growth slowed to 1.6% in the first quarter, driven by lower growth in consumer spending. Forward-looking indicators point to softening growth, as rising consumer debt, elevated interest rates and persistent inflation pressures pose risks to the economy.

  3. U.S. INFLATION: During the quarter, inflation data came in ahead of expectations. Headline U.S. inflation, as measured by the Consumer Price Index (CPI), closed the quarter at +3.5% on a year-over-year basis, while the Federal Reserve’s preferred gauge, the personal-consumption-expenditures price index, rose 2.8% year over year. Shelter (rent) increased 5.7% over the last year and accounted for over 60% of the total 12-month increase for CPI, excluding food and energy.

  4. U.S. LABOR MARKET: In March, the U.S. labor market added jobs for the 39th straight month, closing the quarter with an unemployment rate of 3.8%. While wage gains moderated, low layoff activity and a high number of job openings indicate that the labor market remains robust.

  5. GLOBAL ECONOMIC GROWTH: During the quarter, global economic activity improved, driven by increasing manufacturing and services data in Europe and some parts of Asia, strengthening domestic demand, and moderating inflation.

If you have any investment questions, call our expert team today at 214.978.3300.