KF Update – Market, Economic, & Business Updates
6 Minute Read
Good morning, we hope this email finds you well and you are gearing up for summer. We wanted to send along some updates on the markets, economy, and new additions to the Kane Financial family. We hope you find this information helpful.
Markets & Economy
US blue chip stocks have started the year relatively strong, with the S&P 500 up almost 7%. Here are the 2024 year to date returns of several notable asset classes:
Dow Jones – Large US Value Companies – 1.46%
S&P 500 – Large US Companies – 6.92%
Nasdaq – Large US Growth Companies – 6.11%
Russell 2000 – Small/Mid US Companies – (0.84%)
MSCI EAFE – Large International Companies – 2.77%
Barclays Bond Index – Aggregate US Bonds – (3.19%)
Gold – 12.74%
Silver – 16.12%
Bitcoin – 52.00%
*source Kwanti
After a strong start to the year, higher than expected inflation data rattled the markets in April, and gave pause to the 3 rate cuts that were penciled in for 2024. While inflation is stickier than expected, and 3 rates cuts may not come to fruition, the April downturn could have been an overreaction.
The US economy and consumer has continued to remain strong in the face of higher inflation and interest rates over the past 2 years. While a federal funds rate of over 5% isn’t ideal, it’s a far cry from the double-digit rates of the mid 1980s.
Additionally, the bonds within our portfolios are yielding around 5%, and we have a plethora of attractive options with our bank for our cash savings including CDs, high yield savings accounts, and money market funds that are also yielding nearly 5%.
Drowning out the Noise
While higher interest rates and inflation have some negative impacts on investments over short periods of time, long-term it always goes back to the profits of the underlying companies.
Same goes for presidential elections, geopolitical tensions, and economic data such as jobs numbers. Short-term, these events will move markets as investors react to them, but long-term it always goes back to company earnings.
Russell 2000
While most major indexes have recovered from their October of 2022 lows, the Russell 2000, which is comprised of small and mid-sized US companies, remains nearly 17% down from it’s high point in November of 2021.
Small and mid-sized companies are more sensitive to interest rates which is behind its underperformance. If we see inflation numbers continue to trend downwards, and rate cuts happen, this index could benefit.
Historically, small and mid-sized US companies have been the best performing over long periods of time.
Completion of Tax Season
With tax season complete, if you haven’t already, we would encourage you to stop by with your tax return or bring it along to your next meeting so that we can make a copy and save it to your file.
Additionally, we like to review client tax returns for any tax planning opportunities. We are typically in the office M-F 8:30am – 3:30pm, so you can stop by at your convenience.
Kane Financial Updates
We are excited to announce we have several new additions to the Kane Financial family. Kristi Kosmoski has been hired on a part-time basis as an administrative assistant.
She will be assisting Renee with much of the day-to-day activities of our practice including scheduling meetings. We are excited to welcome Kristi to our practice!
Maeve and Ellie
We had to say goodbye to our beloved Lincoln this past January and we miss him dearly. We are excited to welcome two new additions to our family, Ellie (left) and Maeve (right).
They are 4 months old and quite busy! If you stop by the office this summer you may meet them as we acclimate them to Waterville and the Kane Financial office.
Finally, please find attached a copy of our most recent ADV, Form CRS, and Privacy Policy for your records.
If you have any questions, please do not hesitate to contact the office. We hope you find this information helpful, and you have a wonderful summer!
Best,
Clint, Renee, & Kristi