2024 Year Wrap Up…
•U.S. equity markets recorded another banner year and proved their resiliency once again. Led by the Magnificent 7 tech stocks, the S&P 500 finished the year with a 25% gain as the Russell 1000 Value advanced a robust 14%. The Russell 2000, which focuses on small cap companies and is considered a more accurate barometer for the local economy, finished the year with a 10% gain. Ten of the eleven equity sectors finished positive, with the majority having double digit returns.
•In looking overseas, European equity markets performance was largely a mixed bag. The Germany markets led the way with a 19% gain while France’s CAC 40 was a substantial laggard with a 2% loss, largely on the back of ongoing political turmoil and fiscal deficit issues. Looking further east, Asian markets had strong performances, all finished the year up double digits, led by Japanese market’s 20% gain on the year.
•Reviewing rates, the Fed’s overnight lending rate finished the year in a range of 4.25-4.50% thanks to three rate cuts in the latter part of the year. The U.S. Treasury 10-year rate finished the year at a relatively elevated level of 4.53%, substantially higher than the sub 4% rate found at the beginning of the year. Throughout 2024, the Treasury yield curve largely flattened – going from being an inverted yield to a more traditional rising curve, albeit remaining fairly flat. One area of the fixed income asset class that struggled was long dated bonds which felt the biggest effects of a rising 10-year Treasury yield.
•Looking at commodities, they had quite the roller coaster of a year across the asset class. Gold and silver had a banner year, finishing at all-time highs, largely fueled by speculation and their appeal as asset safe havens. Oil struggled last year, with Brent and WTI finishing the year negative. But, while oil struggled, natural gas finally finished the year with a 50% gain. Overall, an interesting year, to say the least!