DeMarche

Domestic markets struggled in April due to poor investor sentiment around Middle Eastern geopolitical tensions and lower expectations that a rate cut will come soon. This sentiment spilled over to fixed income, with yields skyrocketing over the month and eating into bond returns. International equities faired marginally better over the month due to increased confidence that the ECB will make their first cut in June, but still ended in the red. While most developed markets fell in April, emerging markets made gains over the month propped up by the hefty gains from China. Read the latest DeMarche Dashboard, our monthly flash report, for more insight into why prospects for a rate cut have faded, analysis of recent events, and a data-driven overview of domestic and international markets and economies. #demarche #institutionalinvestors #markets #inflation #globalmarkets #equities #fixedincome #ratecuts #europe #china #federalreserve #interestrates #economy #emergingmarkets #developedmarkets #msci

Watch our latest Capital Market Review Key Takeaways video as DeMarche Senior Consultant James Dykstal, CFA, reviews the most significant developments impacting returns in the first quarter of 2024. The last two months of 2023 provided a tailwind to international stocks as the dollar weakened. The trend reversed itself in the first quarter and the dollar strengthened as expectations for rate cuts diminished. The S&P 500 continued its winning streak, returning 10.6%. Four stocks – Nvidia, Amazon, Meta and Microsoft – account for almost half of the market’s return for the quarter. Interest rates increased, and expectations for a Fed rate cut waned as economic data continues to show above-target inflation. Shelter costs are the main driver of inflation, contributing over 45% to the increase.

Get a concise but comprehensive overview of the first quarter with the DeMarche Capital Market Review (CMR). 2024 started out good for the capital markets. The S&P 500 hit a new high in the first quarter. The so-called “Magnificent Seven” became the “Fab Four” as Nvidia and three others drove the index forward. Interest rates increased as markets digested more economic data suggesting that the Fed would keep rates “higher for longer.” CPI continues to be stubborn. Shelter costs remain the sticking point as the main driver of the increase in inflation, contributing over 45% to the increase. This stubbornness should keep the Fed on the sideline most of the year. #demarche #institutionalinvestors #fabfour #capitalmarkets #cpi #inflation #federalreserve #fed #interestrates #equities #fixedincome #domesticequities #internationalequities #lessliquidstrategies

In any portfolio, it is important to determine the allocation between international and domestic equities. However, it may not be as simple as it seems. Differentiating factors between U.S. and non-U.S. market returns and valuations, in both developed and emerging markets, help determine performance. These factors include sentiment, central bank policy, currency management, and geopolitics. In our latest Research in Action Paper, authors Quinn Dippel, CFA and Regan Hamilton provide insight into the potential performance drivers of non-U.S. markets and how each component may perform in different market environments. #demarche #institutionalinvestors, #internationalequities, #emergingmarkets, #developedmarkets, #centralbanks, #assetallocation, #performancedrivers

Read the latest DeMarche Dashboard, our monthly flash report, for insights on recent events and a data-driven overview of domestic and international markets and economies. Most equity and domestic fixed income indexes gained in March as new economic data showed a relatively resilient economy. The previous trend of growth stocks outperforming value reversed, and the S&P 500 Equal Weight Index outperformed the traditional S&P 500. In international markets, Europe’s economic data continued to show a slowdown, leading to investors hoping that a rate cut is on the horizon, while Japan finally did away with its negative interest rate policy. The result was strong gains in developed international stocks.

Join us on Tuesday, March 26th for our 2024 Market Outlook Webinar. Throughout 2022 and 2023, the tumultuous stock and bond markets were roiled by inflation. While the bear market is over, three questions loom over 2024. Will we get interest rate cuts? The Federal Reserve is in a wait-and-see mode for the first quarter of 2024 while markets await the answer. Will the U.S. economy go into recession and, if so, when? Recession has hit the UK and Japan. The inverted U.S. yield curve has traditionally signaled recession, but our economy has defied the trend so far. And how will markets react to the November elections? Voters will decide who controls Congress and the White House, with significant potential impact for the economy and markets alike.  We'll cover this and more with our insights into the broad market, domestic and international equities, fixed income, and less-liquid strategies. https://cvent.me/BoQo95

Over the past five decades, the Federal Reserve has hiked interest rates to cool the economy and curtail inflation. However, has the Federal Reserve ever successfully engineered a “soft landing?” In our latest Research in Action Paper, authors James Dykstal, CFA, Matt Oakes and Luke Crawford look at rate hikes, the impact on the economy, and the subsequent impact on stock and bond markets with an eye on what it means for institutional investors. #demarche #interestrates #institutionalinvestors #federalreserve

Thank you to everyone who attended DeMarche’s 3rd Annual International Women’s Day luncheon. A special thanks to our panelists Marleah Campbell, Angela Felts Gieras, ACC, CFRE, Dana M. K.napp, Anne Rippetoe Scharf and our own Peg VanWagoner and Regan Hamilton. We are also grateful to our luncheon sponsors, CFA Society of Kansas City and Nicholson Meyer Capital Management, Inc. This year’s program focused on women’s leadership in arts, sports, and the cultural sector, considering how the interaction between them helps our business community develop and the Kansas City region thrive. International Women’s Day celebrates the strength, resilience, and achievements of women around the world. DeMarche is honored that so many remarkable women joined us today in a spirit of empowerment, inspiration, and unity as we honor the extraordinary contributions of women in our hometown of Kansas City. #internationalwomensday2024

Equity markets rallied again last month across small and larger cap indices. Broad-based small cap indices even outpaced their large cap peers, contrary to the past few months. Earnings beats from the S&P 500 Index helped contribute to domestic returns, but it was Nvidia's unexpected and strong earnings report that drove global developed markets. A large bounce back from China's market due to a government stimulus led to a strong increase in emerging market returns as well.

Markets returns in January provided mixed results globally. Large-cap growth-oriented stocks saw the most gains in the U.S. Small-cap stocks struggled despite positive economic data that revealed a fourth-quarter GDP growth of 3.3%, improving manufacturing data, and a robust labor market. European indices struggled as the Euro Area reported a fourth-quarter GDP of 0% and contractionary production numbers. However, Japan uplifted overall international returns from strong advances in their market returns. Read the DeMarche Dashboard, our monthly flash report, for more insights on recent events and a data-driven overview of domestic and international markets and economies. #demarche #institutionalinvestors #markets #inflation #equities  #globalmarkets #equities #fixedincome #europe #euro #eurozone #china  #federalreserve #interestrates #economy #emergingmarkets #msci