The First Quarter Review
The first quarter is over, and for stocks, it was the best first quarter since Q1 of 2019, closing at an all-time high and marking the 21st for the quarter (nearly a third of all trading days in 2024
The first quarter is over, and for stocks, it was the best first quarter since Q1 of 2019, closing at an all-time high and marking the 21st for the quarter (nearly a third of all trading days in 2024 have closed at an all-time high).
One sleeper asset was oil, delivering the best first-quarter performance, as shown below, partially because of a withdrawal in U.S. crude inventories, a drop in U.S. gasoline stocks, and supply disruptions after Ukrainian attacks on Russian refineries.
Then we have gold, which had a surprising rebound, hitting an all-time high in March. Gold’s rally is largely driven by rate cut expectations that the Fed later confirmed, or at least didn’t disconfirm. Falling rates work against the strength of the US dollar, which makes gold more appealing to investors.
Small and mid-cap stocks again struggled to catch up to their larger counterparts, largely due to the sector’s weighting in small regional banks and companies that are impacted more by higher borrowing costs.
Lastly, rates rose from their late 2023 lows, pushing the bond index lower, but the strong rally in stocks helped push high-yield bonds higher.
From a stock sector perspective, it’s really no surprise that energy is up the most, given oil’s rise. But what is surprising is that technology underperformed so much given Nvidia’s incredible quarter, rising around 80%, however, Apple and Adobe detracted from the gains that companies like Microsoft, Broadcom, Nvidia, and Salesforce generated.
Large banks + Berkshire Hathaway helped push the financials index to the top.
General Electric and Caterpillar pushed the industrials index to the top.
The 2 biggest callouts are:
The market’s performance is much more broad than just the Magnificent 7; and
Value sectors are the ones that are floating to the top again, even with communications and tech doing so well.
It’s been a fantastic quarter, and it speaks to the power of staying invested.
My Reading List
Emotions always win out over spreadsheets
Inside of Google’s Deep Mind
American’s have changed how they spend