Kitchen Table Finance

S3E15 -Q1 2024 Review and Q2 Outlook

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In this episode, we kick off with a warm welcome and jump straight into our Q1 quarterly review followed by the Q2 outlook. Despite entering the year on a shaky start, Q1 turned out exceptionally well, building on the achievements of a strong 2023.

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Q1 Highlights:
  • The beginning of January began forgettable, raising concerns given the adage “as January goes in the market, so goes the year.” However, the market quickly rebounded, defying early gloom.
  • Major indices including the S&P 500, NASDAQ, Europe’s stocks 600, and the Japanese Nikkei hit new record highs, some repeatedly, showcasing strong market performance despite the lack of significant positive economic news.
  • The all-cap world index reported an 8.2% increase, signaling solid market health.
    • Key Observations and Concerns:
    • Fed’s interest rates and inflation remain primary focuses. With interest rates peaking in July 2023 and the Fed pausing rate hikes without initiating cuts, market watchers are on high alert.
    • Recent CPI reports show a slight uptick in the six-month mark, hinting at persistent inflationary pressures, especially in the service sectors, which continue to experience wage pressure and other inflationary concerns.
      • Insights and Expectations:
      • The challenges of managing inflation resemble the struggles of weight loss, where initial successes are followed by harder-to-achieve continued progress, indicative of a potential economic plateau.
      • The manufacturing versus services sector dichotomy, with inflation seemingly under control in the former but unabated in the latter, suggests two diverging economic narratives.
        • The Inflection Point:
        • The current economic stance is seen as an inflection point, with uncertainty about whether the market will continue to rise or begin to correct, reflecting both opportunities and challenges ahead.

          • In summary, Q1 showcased unexpected market resilience with exceptional highs across various indices, despite looming concerns over Fed rates and inflation. Looking ahead, navigating the nuanced dynamics between manufacturing and services sectors, alongside managing inflationary pressures, will be crucial for sustaining growth and stability in Q2 and beyond.

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          Kitchen Table FinanceBy David Shotwell CFP(r) and Nick Nauta CFP(r)
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