PSN Top Guns Q4 2024: U.S. Equities Cap Off a Strong Year with a Solid Fourth Quarter
The S&P 500 index rallied to record highs in November, riding investor hopes that pro-growth fiscal policies will return under Trump 2.0. Despite strong headwinds in December the S&P 500 index posted a +2.41% return during the fourth quarter. However, the strong performance during the first three quarters of 2024 for international equities, particularly emerging market equities, came to a screeching halt during the fourth quarter as concerns over trade tariffs put an end to the rally.
Despite the Federal Reserve (Fed) implementing two 25 basis point cuts during the quarter, the Bloomberg U.S. Aggregate index fell -3.06% as inflation remained sticky and the Fed signaled it may not cut interest rates as aggressively as markets hoped.
U.S. equities closed out 2024 on a strong note and were supported by Donald Trump’s election win and the accompanying “Red Sweep” of Congress. Equities rallied following the election results with increasing hopes that Trump’s pro-growth initiatives would boost equities. However, the rally stalled in December after the Fed ratcheted back the number of forecasted rate cuts in 2025. The primary drivers for the equity performance largely remained the same during the quarter. Growth sectors like consumer discretionary (S&P 500 Consumer Discretionary index +14.25%) and communication services (S&P 500 Communication Services index +8.87%) led the way while large cap (Russell 1000 index +2.75%) strategies outperformed small cap (Russell 2000 index +0.33%) strategies. Below are some of the strategies that make up the PSN Top Guns Large Growth Universe.
After a strong first three quarters of the year, international equities (MSCI World ex. USA -7.36%) were hit with numerous headwinds during the fourth quarter. While the expected pro-growth fiscal initiatives boosted domestic equities, the potential for higher trade tariffs hindered the equities of major trade partners like Europe (MSCI Europe index -9.68%) and China (MSCI China index -7.66%). Additionally, prices on international equities were pressured by signals that interest rates may remain higher than expected. Lastly, soft economic data in the Eurozone raised fears of a recession. The following strategies made the PSN Top Guns list for the Japan Universe.
Despite the Fed and the European Central Bank both cutting key interest rates during the fourth quarter, sticky inflation and signals that interest rates will remain higher than previously expected resulted in heightened fixed income volatility. Yields on 10-year Treasuries rose 79 bps during the quarter due to uncertainty around the Fed’s plan for future rate cuts amidst the potential for rising inflation due to President Trump’s pro-growth initiatives. Riskier, high yield bonds, measured by the ICE BofA US High Yield Master II index, outperformed by posting a +0.16% return during the quarter. Below are some of the strategies that make up the PSN Top Guns High Yield 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 Q4 2024: U.S. Equities Cap Off a Strong Year with a Solid Fourth Quarter
The S&P 500 index rallied to record highs in November, riding investor hopes that pro-growth fiscal policies will return under Trump 2.0. Despite strong headwinds in December the S&P 500 index posted a +2.41% return during the fourth quarter. However, the strong performance during the first three quarters of 2024 for international equities, particularly emerging market equities, came to a screeching halt during the fourth quarter as concerns over trade tariffs put an end to the rally.
Despite the Federal Reserve (Fed) implementing two 25 basis point cuts during the quarter, the Bloomberg U.S. Aggregate index fell -3.06% as inflation remained sticky and the Fed signaled it may not cut interest rates as aggressively as markets hoped.
U.S. equities closed out 2024 on a strong note and were supported by Donald Trump’s election win and the accompanying “Red Sweep” of Congress. Equities rallied following the election results with increasing hopes that Trump’s pro-growth initiatives would boost equities. However, the rally stalled in December after the Fed ratcheted back the number of forecasted rate cuts in 2025. The primary drivers for the equity performance largely remained the same during the quarter. Growth sectors like consumer discretionary (S&P 500 Consumer Discretionary index +14.25%) and communication services (S&P 500 Communication Services index +8.87%) led the way while large cap (Russell 1000 index +2.75%) strategies outperformed small cap (Russell 2000 index +0.33%) strategies. Below are some of the strategies that make up the PSN Top Guns Large Growth Universe.
After a strong first three quarters of the year, international equities (MSCI World ex. USA -7.36%) were hit with numerous headwinds during the fourth quarter. While the expected pro-growth fiscal initiatives boosted domestic equities, the potential for higher trade tariffs hindered the equities of major trade partners like Europe (MSCI Europe index -9.68%) and China (MSCI China index -7.66%). Additionally, prices on international equities were pressured by signals that interest rates may remain higher than expected. Lastly, soft economic data in the Eurozone raised fears of a recession. The following strategies made the PSN Top Guns list for the Japan Universe.
Despite the Fed and the European Central Bank both cutting key interest rates during the fourth quarter, sticky inflation and signals that interest rates will remain higher than previously expected resulted in heightened fixed income volatility. Yields on 10-year Treasuries rose 79 bps during the quarter due to uncertainty around the Fed’s plan for future rate cuts amidst the potential for rising inflation due to President Trump’s pro-growth initiatives. Riskier, high yield bonds, measured by the ICE BofA US High Yield Master II index, outperformed by posting a +0.16% return during the quarter. Below are some of the strategies that make up the PSN Top Guns High Yield 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.