Richard Drury
Regardless of financial uncertainty, markets rallied within the first half of 2024 on the again of anticipated Fed fee cuts and positive aspects in AI shares. The second half of the yr is prone to be largely characterised by potential Fed fee cuts, stabilizing bond markets, money shift in holdings to dangerous belongings and election-induced volatility. Sustaining a long-term, disciplined strategy will probably be key to navigating the subsequent six months.
Regardless of ongoing financial uncertainty, the market rallied within the first half of the yr, boosted by an anticipated Fed fee reduce and a sustained rally in AI shares.
The S&P 500 is up 15.3%, whereas the Nasdaq is up 18.6% in six months. The yield on the 10-year Treasury fell from an April peak of 4.7% to 4.4%, leaving the bond market comparatively flat.
Worldwide shares additionally carried out properly, with developed markets up 5.7% and creating markets by 7.7%. Trying forward, listed below are 4 key elements that traders ought to look ahead to within the second half of 2024.
- The Fed is getting nearer to chopping charges, because the US economic system softens. We count on contraction in September and December, however this may require additional proof of a slowdown.
- Extra secure charges help bondsand boosted costs, holding the bond market almost flat year-to-date, a big enchancment over final yr.
- Many traders are staying in moneyattracts greater returns and represents a possible tailwind for danger belongings.
- The US presidential election is heating up, which ends up in elevated volatility. Historical past exhibits that markets can thrive each methods, underscoring the significance of the long run.
Whereas these developments create new dangers, the primary half of the yr exhibits how overreacting to headlines can result in poor funding selections. Keep invested, diversified and disciplined to climate uncertainties and seize alternatives by way of 2024 and past.
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Editor’s word: The bullet factors for this text have been chosen by the editors of Looking for Alpha.
