PSN Top Guns Q3 2024: Easing Monetary Policies Boost Global Markets
Despite a pronounced uptick in volatility during the third quarter which resulted in a -8.5% decline in August, the S&P 500 index recovered to post a solid +5.89% return. A weaker-than-expected jobs report ignited concerns that a recession was imminent. However, equities reversed course after the Federal Reserve (Fed) cut interest rates by 50 basis points. Meanwhile, the MSCI Emerging Markets index posted a solid +8.88% return during the quarter following the announcement of new stimulus in China.
Fixed income also benefited from the 50 basis point cut and expectations for more cuts to come as the Bloomberg U.S. Aggregate index posted a solid +5.20% return.
Despite posting a solid +5.89% return, it wasn’t a smooth ride for the S&P 500 index. After a turbulent August, equities reached record highs following the Fed’s 50 basis point interest rate cut while signaling more to come. The rate cut provided a boost to the sector and style performance. The top performing equity sectors included utilities and real estate while energy was the only sector to generate negative returns. Additionally, the information technology sector, which has been the leader in recent years, posted a small gain during the quarter. In another reversal of recent trends, value stocks (Russell 3000 Value index +9.47%) outperformed growth stocks (Russell 3000 Growth index +3.42%). Below are some of the strategies that make up the PSN Top Guns Small Cap Value Universe.
For the second straight quarter emerging market equities (MSCI Emerging Markets index +8.88%), which were driven by strong Chinese equity returns, outperformed developed equities (MSCI World index +6.46%). Easing monetary policies in the U.S. and the announced stimulus in China, with expectations for additional measures provided the tailwinds for emerging market equities. Meanwhile, for the first time in six quarters, international developed equities (MSCI World ex USA index +7.84%) outperformed U.S. equities. The strong returns were driven by Japanese equities which reached all-time highs during the beginning of the quarter despite historically high volatility following the Bank of Japan’s decision to raise interest rates. The following strategies made the PSN Top Guns list for the International Equity Universe.
Softer-than-expected economic data led to the Fed’s long-awaited decision to cut interest rates by 50 basis points. Expectations for swifter future monetary easing resulted in a weakening U.S. Dollar and falling U.S. Treasury yields. 2-year Treasury yields fell 111 basis points, while 10-year Treasury yields fell 55 basis points. The steep fall in shorter dated yields resulted in the steepening of the yield curve which brought an end to the inverted yield curve. Higher quality bonds (Bloomberg U.S. Corporate Investment Grade index +5.84%) outpaced lower quality high yield bonds (ICE BofA U.S. High Yield index +5.28%) during the quarter. Global monetary easing and a softer U.S. Dollar bolstered international fixed income (FTSE World Govt ex U.S. +8.61%) which outperformed U.S. fixed income (Bloomberg U.S. Aggregate index +5.20%) during the quarter. Below are some of the strategies that make up the PSN Top Guns International Fixed Income 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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PSN Top Guns Q3 2024: Easing Monetary Policies Boost Global Markets
Despite a pronounced uptick in volatility during the third quarter which resulted in a -8.5% decline in August, the S&P 500 index recovered to post a solid +5.89% return. A weaker-than-expected jobs report ignited concerns that a recession was imminent. However, equities reversed course after the Federal Reserve (Fed) cut interest rates by 50 basis points. Meanwhile, the MSCI Emerging Markets index posted a solid +8.88% return during the quarter following the announcement of new stimulus in China.
Fixed income also benefited from the 50 basis point cut and expectations for more cuts to come as the Bloomberg U.S. Aggregate index posted a solid +5.20% return.
Despite posting a solid +5.89% return, it wasn’t a smooth ride for the S&P 500 index. After a turbulent August, equities reached record highs following the Fed’s 50 basis point interest rate cut while signaling more to come. The rate cut provided a boost to the sector and style performance. The top performing equity sectors included utilities and real estate while energy was the only sector to generate negative returns. Additionally, the information technology sector, which has been the leader in recent years, posted a small gain during the quarter. In another reversal of recent trends, value stocks (Russell 3000 Value index +9.47%) outperformed growth stocks (Russell 3000 Growth index +3.42%). Below are some of the strategies that make up the PSN Top Guns Small Cap Value Universe.
For the second straight quarter emerging market equities (MSCI Emerging Markets index +8.88%), which were driven by strong Chinese equity returns, outperformed developed equities (MSCI World index +6.46%). Easing monetary policies in the U.S. and the announced stimulus in China, with expectations for additional measures provided the tailwinds for emerging market equities. Meanwhile, for the first time in six quarters, international developed equities (MSCI World ex USA index +7.84%) outperformed U.S. equities. The strong returns were driven by Japanese equities which reached all-time highs during the beginning of the quarter despite historically high volatility following the Bank of Japan’s decision to raise interest rates. The following strategies made the PSN Top Guns list for the International Equity Universe.
Softer-than-expected economic data led to the Fed’s long-awaited decision to cut interest rates by 50 basis points. Expectations for swifter future monetary easing resulted in a weakening U.S. Dollar and falling U.S. Treasury yields. 2-year Treasury yields fell 111 basis points, while 10-year Treasury yields fell 55 basis points. The steep fall in shorter dated yields resulted in the steepening of the yield curve which brought an end to the inverted yield curve. Higher quality bonds (Bloomberg U.S. Corporate Investment Grade index +5.84%) outpaced lower quality high yield bonds (ICE BofA U.S. High Yield index +5.28%) during the quarter. Global monetary easing and a softer U.S. Dollar bolstered international fixed income (FTSE World Govt ex U.S. +8.61%) which outperformed U.S. fixed income (Bloomberg U.S. Aggregate index +5.20%) during the quarter. Below are some of the strategies that make up the PSN Top Guns International Fixed Income 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.