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Market Commentary March 31st, 2024

April 09, 2024

Market Commentary March 31, 2024



1Q 2024


S&P 500



S&P 500 Equal Weight






Bloomberg US Int. Term Corporate Bond



Welcome to a new year, and while financial markets can vary widely from year to year, so far 2024 has continued to be good for equity investors.  The momentum from a strong fourth quarter in 2023 carried in to 2024 with the S&P 500 providing double digit returns for two consecutive quarters. 

The S&P 500 increased 10.2% in the first quarter (Q1) after gaining 11.2% in the final quarter of 2023. After keeping pace in Q4 of last year the Equal Weighted S&P 500 lagged its market cap weighted sibling the S&P 500, ending the quarter up 7.4% as mega caps once again outpaced the broader index.  International stocks also fared well with the MSCI EAFE index finishing the quarter up 9.2%.

Further dissecting the quarter for stocks, we want to highlight what we think are some interesting developments.  We spoke frequently last year about the “Magnificent Seven” mega-cap stocks (Amazon, Apple, Google, Meta, Microsoft, Nvidia, Tesla) as primary drivers of index returns. So far in 2024 the Magnificent Seven have been whittled down to the “Fab Five” with Apple and Tesla struggling in the quarter. Additionally, we noted an interesting shift in markets during the month of March as the energy, utilities, and materials sectors all outperformed communications and tech which had driven strong performance in January and February. Strong performance from commodities-based sectors isn’t completely surprising as inflation data, represented by CPI, increased more than expected in the months of February and March.

Another concept we’d like to discuss is that of investment “factors.” Factor analysis attempts to identify the specific characteristics or qualities a stock or bond may be exposed to that drive their returns.  Two of the most widely discussed, and perhaps well-known factors are growth and value. The growth factor attempts to attribute what portion of an asset’s returns are driven by expectations of earnings growth, while the value factor attempts to identify what portion of returns are driven by an asset’s valuation. In 2023 growth was the dominant factor in market returns. In the first quarter of 2024 one factor far and away provided the highest source of return: momentum. The momentum factor outperformed the S&P 500 by over 8% in the quarter.  Blackrock defines momentum as “stocks exhibiting relatively higher price momentum.” While Blackrock uses fairly complex math equations to calculate what they define as “momentum,” essentially it is trying to attribute what effect an increasing stock price leads to more increases in stock prices.  This factor is what we would consider a “technical” factor as it has no root in a company’s underlying financial performance, it is therefore very challenging to evaluate whether outperformance of a stock due to momentum will persist.

Shifting our focus to monetary policy, expectations of actions the Federal Reserve could take with regards to interest rates have already changed dramatically since the start of the year.  Heading into 2024 the market anticipated that we could see 6 to 7 short-term interest rate cuts from the Fed starting in March. During the quarter those expectations shifted to three cuts and pushed the timing of the cuts out to the summer.  We are not incredibly surprised by this as rate cut magnitude and timing from the market has been consistently wrong since the beginning of the current cycle two years ago in March 2022.

Fixed income indexes were somewhat volatile through Q1 of 2024 – but ultimately finished at or near flat with the Bloomberg US Intermediate Term Corporate Bond Index up 0.3% for the quarter. Much of the rate movement continued to be driven by speculation or expectations around when the Fed would begin to loosen monetary policy via short term rate cuts.  Meanwhile, slightly hotter than expected inflation data pushed longer term rates slightly higher – as longer term rates tend to trade on inflation and growth expectations.


As always, if you have questions regarding your portfolio, please consult your financial advisor. We appreciate your continued trust in SG Long Financial and look forward to working with you in the future.

Rob Richardson, CFA

Chief Investment Officer

Important Disclosures

Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal. The S&P 500 Index is a recognized benchmark used by investors and the investment industry for the equity market. Indexes are not a managed portfolio and are not subject to advisory fees or trading costs.  Investors cannot invest directly in the S&P 500.  Indexes and/or market benchmarks references used throughout this report remain the copyrighted property of their respective owners. Before investing, please carefully consider your investment objectives, risks, charges, and expenses. Views expressed do not necessarily represent the views of S.G. Long Financial Service Corp. (“SGLFS”) and are subject to change at any time based upon market or other conditions. The information provided is for general informational purposes only and should not be considered individualized or personalized investment advice.

SGLFS is the parent company of S.G. Long & Company and SGL Investment Advisors, Inc. S.G. Long & Company is a broker-dealer registered with the SEC, a FINRA member firm and a state-registered investment advisor. SGL Investment Advisors, Inc is a SEC registered investment advisory. Clients and employees of SGLFS may maintain positions discussed herein.