Articles | February 12, 2024
January 2024 Market Review and a Look Ahead
Following the strong close to the calendar year, market dynamics in January resembled much of what we had seen throughout 2023:
- U.S. equities outperformed international equities.
- Large cap stocks fared well.
- Small cap stocks struggled.
- Growth stocks outperformed value stocks.
- Bond performance was mixed with yields ticking mostly higher.
The table below shows January 2024 performance for equity, fixed income and commodities.
|
Equities |
January 2024 (%) |
|
All Cap U.S. Stocks |
|
|
Russell 3000 |
1.1 |
|
Growth |
2.2 |
|
Value |
-0.2 |
|
Large Cap U.S. Stocks |
|
|
S&P 500® |
1.7 |
|
Russell 1000 |
1.4 |
|
Growth |
2.5 |
|
Value |
0.1 |
|
Mid Cap U.S. Stocks |
|
|
S&P 400 |
-1.7 |
|
Russell Midcap |
-1.4 |
|
Growth |
-0.5 |
|
Value |
-1.8 |
|
Small Cap U.S. Stocks |
|
|
S&P 600 |
-3.9 |
|
Russell 2000 |
-3.9 |
|
Growth |
-3.2 |
|
Value |
-4.5 |
|
International |
|
|
MSCI EAFE NR (USD) |
0.6 |
|
MSCI EAFE NR (LOC) |
2.6 |
|
MSCI EM NR (USD) |
-4.6 |
|
MSCI EM NR (LOC) |
-3.5 |
|
Fixed Income |
January 2024 (%) |
|
Bloomberg |
|
|
U.S. Aggregate |
-0.3 |
|
U.S. Treasury: 1-3 Year |
0.4 |
|
U.S. Treasury |
-0.3 |
|
U.S. Treasury Long |
-2.2 |
|
U.S. TIPS |
0.2 |
|
U.S. Credit: 1-3 Year |
0.4 |
|
U.S. Intermediate Credit |
0.2 |
|
U.S. Credit |
-0.2 |
|
U.S. Intermediate G/C |
0.2 |
|
U.S. Govt/Credit |
-0.2 |
|
U.S. Govt/Credit Long |
-1.5 |
|
U.S. MBS |
-0.5 |
|
U.S. Corp High Yield |
0 |
|
Global Aggregate (USD) |
-1.4 |
|
Emerging Markets (USD) |
-0.6 |
|
Morningstar/LSTA |
|
|
Leveraged Loan |
0.7 |
|
Alternatives |
January 2024 |
|
Bloomberg Commodity |
0.4 |
|
S&P GSCI |
4.5 |
Sources: Standard & Poor's, Bloomberg, MSCI and Russell
The S&P indices are a product of S&P Dow Jones Indices, LLC and/or its affiliates (collectively, “S&P Dow Jones”) and has been licensed for use by Segal Marco Advisors. ©2024 S&P Dow Jones Indices, LLC a division of S&P Global Inc. and/or its affiliates. All rights reserved. Please see www.spdji.com for additional information about trademarks and limitations of liability.
Equity markets
December’s encouraging broadening of performance for stocks proved short lived, as large caps (+1.7 percent) materially outperformed both mid-caps (-1.4 percent) and small caps (-3.9 percent) in January. Once again, the large-cap growth segment of the market (+2.5 percent), was dominated by the performance of the “Magnificent Seven” (Amazon, Apple, Google, Meta, Microsoft, NVIDIA, and Tesla, as was highlighted in our December 2023 market review) outpacing large-cap value stocks (+0.1 percent).
Non-U.S. developed market stocks (+0.6 percent) managed a positive return, while emerging markets (-4.6 percent) continued to struggle thanks in large part to China, the largest constituent country in the MSCI EM index.
Fixed income markets
U.S. Treasury short-term yields remained within the Federal Reserve’s (the Fed’s) benchmark rate range of 5.25 to 5.50 percent, while intermediate and longer-term bond yields rose during the month. As a result, the core Bloomberg U.S. Aggregate Index returned -0.3 percent for the month, while longer-duration Treasury bonds suffered more, returning -2.2 percent.
U.S. Treasury Yield Curve
Source: United States Treasury
Investment-grade corporate bonds (-0.2 percent) and high yield bonds (0.0 percent) were little changed.
Looking ahead
The Fed has not increased its benchmark federal funds rate in more than six months (since July 2023). Meanwhile, inflation data continues to trend lower, while economic growth and employment readings have generally bested consensus expectations. Amidst this positive backdrop, stocks may continue to fare well, especially if earnings continue to provide support for valuations.
Bonds should provide reasonably attractive returns going forward if Fed rate cut expectations are managed and economic conditions do not overheat.
2024 could provide a more stable economic and financial backdrop, but the data dependency we have experienced in recent years, coupled with geopolitical and political backdrops may still result in volatility as the year unfolds.
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The information and opinions herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This article and the data and analysis herein is intended for general education only and not as investment advice. It is not intended for use as a basis for investment decisions, nor should it be construed as advice designed to meet the needs of any particular investor. On all matters involving legal interpretations and regulatory issues, investors should consult legal counsel.
