U.S stocks (Russell 3000 index +3.22%) continued their positive performance during the second quarter as artificial intelligence (AI) themed technology stocks continued to drive performance. Expectations that the Federal Reserve (Fed) will begin cutting rates in 2024 dimmed some at the beginning of the quarter as inflation remained stubborn. However, cooler inflation data at the end of the quarter gave investors optimism that the Fed is inching closer to cutting rates. Emerging market equities (MSCI Emerging Markets index +5.12%) outperformed developed markets (MSCI World index +2.78%) during the quarter as a rebound in China and softer U.S. macroeconomic data provided a boost for emerging market equities.
Concerns about stubborn inflation caused investors to reset their expectations for rate cuts which hindered bond prices at the beginning of the quarter. However, bonds (Bloomberg U.S. Aggregate index +0.07%) rebounded towards quarter end as cooling inflation and softer employment data eased concerns that the Fed may delay interest rate cuts.
The Fed’s upcoming interest rate decisions continued to be the primary focus for equity investors during the quarter. Concerns about the economy overheating and inflation remaining stubborn gave way to increased optimism for a soft landing and rate cuts by the end of the quarter. The S&P 500 index posted a +4.28% on the increased optimism while the information technology (S&P 500 Information Technology index +13.81%) and communication services (S&P 500 Communication Services index +9.37%) sectors were the top performing sectors. AI-related stocks continued to soar amid strong earnings and outlooks. Below are some of the strategies that make up the PSN Top Guns Mega Cap Universe
International developed equities (MSCI EAFE index -0.17%) fell during the quarter on political uncertainty in France and diminishing expectations for steep interest rate cuts. While the European Central Bank cut rates by 25 basis points, expectations for deeper cuts were dampened due to sticky inflation. Meanwhile, a rebound in Chinese equities lead emerging market equities (MSCI Emerging Markets index +5.12%) to outperform developed markets during the quarter. Easing global monetary policies and growing expectations that the Fed will cut rates in 2024 resulting in potential easing in U.S. dollar strength were additional catalysts for the strong quarter for emerging market equities. The following strategies made the PSN Top Guns list for the Emerging Markets Universe.
The Fed remained squarely in the crosshairs during the quarter as bond investors tried to determine when the Central Bank’s rate cutting cycle will begin. Investors ratcheted back their expectations for three rate cuts back in March to just one cut for the remainder of 2024. The reassessment of the timing and number of interest rate cuts due to renewed concerns about sticky inflation hindered bonds at the start of the quarter. However, a softer labor market and encouraging inflation news provided a boost for bonds toward the end of the quarter. Below are some of the strategies that make up the PSN Top Guns Short Maturity Universe
PSN Top Guns quarterly commentary is presented by Zephyr's Market Strategist Ryan Nauman whose analysis and research has been shared on financial industry media including WealthManagement.com, Reuters, CNBC, Bloomberg, MarketWatch.com, Yahoo! Finance, and the Wall Street Journal, while being a regular guest on TD Ameritrade Network, Yahoo! Finance, Bloomberg TV, Bloomberg Radio and Chuck Jaffe’s Money Life podcast.
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AI Themed Stocks Boost Equities
U.S stocks (Russell 3000 index +3.22%) continued their positive performance during the second quarter as artificial intelligence (AI) themed technology stocks continued to drive performance. Expectations that the Federal Reserve (Fed) will begin cutting rates in 2024 dimmed some at the beginning of the quarter as inflation remained stubborn. However, cooler inflation data at the end of the quarter gave investors optimism that the Fed is inching closer to cutting rates. Emerging market equities (MSCI Emerging Markets index +5.12%) outperformed developed markets (MSCI World index +2.78%) during the quarter as a rebound in China and softer U.S. macroeconomic data provided a boost for emerging market equities.
Concerns about stubborn inflation caused investors to reset their expectations for rate cuts which hindered bond prices at the beginning of the quarter. However, bonds (Bloomberg U.S. Aggregate index +0.07%) rebounded towards quarter end as cooling inflation and softer employment data eased concerns that the Fed may delay interest rate cuts.
The Fed’s upcoming interest rate decisions continued to be the primary focus for equity investors during the quarter. Concerns about the economy overheating and inflation remaining stubborn gave way to increased optimism for a soft landing and rate cuts by the end of the quarter. The S&P 500 index posted a +4.28% on the increased optimism while the information technology (S&P 500 Information Technology index +13.81%) and communication services (S&P 500 Communication Services index +9.37%) sectors were the top performing sectors. AI-related stocks continued to soar amid strong earnings and outlooks. Below are some of the strategies that make up the PSN Top Guns Mega Cap Universe
International developed equities (MSCI EAFE index -0.17%) fell during the quarter on political uncertainty in France and diminishing expectations for steep interest rate cuts. While the European Central Bank cut rates by 25 basis points, expectations for deeper cuts were dampened due to sticky inflation. Meanwhile, a rebound in Chinese equities lead emerging market equities (MSCI Emerging Markets index +5.12%) to outperform developed markets during the quarter. Easing global monetary policies and growing expectations that the Fed will cut rates in 2024 resulting in potential easing in U.S. dollar strength were additional catalysts for the strong quarter for emerging market equities. The following strategies made the PSN Top Guns list for the Emerging Markets Universe.
The Fed remained squarely in the crosshairs during the quarter as bond investors tried to determine when the Central Bank’s rate cutting cycle will begin. Investors ratcheted back their expectations for three rate cuts back in March to just one cut for the remainder of 2024. The reassessment of the timing and number of interest rate cuts due to renewed concerns about sticky inflation hindered bonds at the start of the quarter. However, a softer labor market and encouraging inflation news provided a boost for bonds toward the end of the quarter. Below are some of the strategies that make up the PSN Top Guns Short Maturity Universe
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PSN Top Guns quarterly commentary is presented by Zephyr's Market Strategist Ryan Nauman whose analysis and research has been shared on financial industry media including WealthManagement.com, Reuters, CNBC, Bloomberg, MarketWatch.com, Yahoo! Finance, and the Wall Street Journal, while being a regular guest on TD Ameritrade Network, Yahoo! Finance, Bloomberg TV, Bloomberg Radio and Chuck Jaffe’s Money Life podcast.