Year-to-Date Recap
Through the first half of 2024, the U.S. stock market has continued its strong run from late 2023. The S&P 500 is up roughly 15% year-to-date as of late June, while the Nasdaq Composite has gained approximately 18%. This marks a remarkable recovery from the bear market lows of October 2022.
A few themes have driven the rally so far in 2024:
- AI optimism. Artificial intelligence continues to be the dominant theme in markets. Companies exposed to the AI buildout, particularly semiconductor names, have been major contributors to returns.
- Magnificent 7 concentration. A handful of mega-cap technology stocks continue to drive a disproportionate share of index returns. While this has been a tailwind for passive index investors, it has also raised concentration risk.
- Soft-landing confidence. The U.S. economy continues to show remarkable resilience, with the unemployment rate low, consumer spending healthy, and inflation gradually cooling toward the Fed’s 2% target.
- Rate-cut anticipation. After holding interest rates at multi-decade highs for over a year, the Fed is widely expected to begin cutting rates in late 2024. The prospect of lower rates has supported both stocks and bonds.
As always, we caution against chasing recent returns. The market has been resilient, but valuations are elevated and the easy gains of the last six months may be behind us.
Tilia Team Update
We're excited to announce a couple of additions to the Tilia team this year. In April, we welcomed a new Operations Associate to help support our growing client base. In June, we promoted one of our long-time operations team members to a new role focused on client experience. Our team now stands at 14 dedicated professionals, all committed to delivering the highest level of service to our clients.
Looking Ahead
The second half of 2024 will be driven by three main factors: the path of interest rates, the U.S. presidential election in November, and the trajectory of corporate earnings. While each of these is uncertain, we remain confident in our disciplined, long-term approach to portfolio construction.
As always, please reach out if you have any questions or if there's anything we can do to help. We hope you enjoy the rest of your summer.
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