Market Performance
- S&P 500: The index of the 500 largest U.S. companies soared by 26% last year, closing at 4,769, 11 points off its all-time high. This surge was driven by a tech stock rebound and the Federal Reserve's pause in interest rate hikes.
- Tech Stocks: The "Magnificent 7" (Apple, Microsoft, Amazon, Google, Facebook, Tesla, and Nvidia), which had a tough 2022, bounced back contributing significantly to the S&P 500's gains.
- Market Composition: It's interesting to note that these 7 companies now constitute 28% of the S&P 500. An equal-weighted approach across all 500 companies in the index would have yielded about 13% returns, highlighting the tech sector's substantial influence, while the energy, healthcare, and utilities sectors struggled.
- Bond Market Insights: The Bloomberg Aggregate Bond Index rose by 5.31%. Market participants are expecting interest rates to decline, which would be a welcome sign for both bond and stock investors as both types of investments have performed well in declining rate environments.
Economic Indicators
- Inflation: We aren’t in the clear yet, but we have seen declines in the Consumer Price Index from 9.1% to 3.1%. This doesn’t mean groceries are more affordable, it just means that prices aren’t increasing as fast. This slowdown is crucial for the Fed to implement interest rate decreases.
- Economic Strength: With low unemployment and a 2.9% GDP growth rate over the past five quarters, the economy is showing resilience. This performance, one of the strongest since 2001, is dampening recession fears.
- Consumer Sentiment: The positive market performance might come as a surprise to some as consumer sentiment – a measure of how consumers feel about the economy – remained low in 2023 and wasn't too far off of levels from 2007-2008. In January, the index climbed by 13%, hitting a high last recorded in 2021.
Looking Ahead - Election Year
- While election years can be politically charged, historically, the stock market has averaged gains of 11.7% since 1928 during these periods. We're keeping a close eye on how this year's elections might influence the markets.
Milestone News
Milestone Financial partnered with Second Harvest Food Bank of the Lehigh Valley and Chester County Food Bank to host a holiday food drive. Members of the Milestone Team delivered the most needed holiday food items to both locations this week. Thank you to all who donated at all three of our locations in Macungie, Bethlehem, and Spring City. Together, we helped make the holidays happier for thousands of our neighbors.
We are excited to announce that Milestone has been named to the 2024 Forbes List of Best-In-State Wealth Management Teams! We are grateful for the trust you have placed in us, and we remain committed to providing the guidance and support you need to achieve your financial goals. Thank you!
2024 Forbes Best In State Wealth Management Teams, created by SHOOK Research. Presented in Jan 2024 based on data from March 2022 to March 2023. 10,144 Management Teams were considered, approximately 1412 Teams were recognized. Not indicative of advisor’s future performance. Your experience may vary. Click here for more award information., https://www.forbes.com/lists/wealth-management-teams-best-in-state/