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The first quarter of 2024 continued an impressive run, with the S&P 500 Index gaining over 10%, taking total returns to just shy of 30% over the last 12 months (Source: Morningstar).

The March 2024 jobs report confirms the labor market remains resilient despite high interest rates and slowing economic indicators, adding 303,000 jobs. An important caveat is that full-time jobs are dwindling; most of this job growth is part-time jobs, and close to a quarter of new payroll jobs are government employees (Source: Bureau of Labor Statistics). The overall unemployment rate fell back to 3.8% in March from 3.9% the prior month (Source: JPMorgan).

The economy avoided a recession, and GDP estimates for the first quarter of 2024 were 2.5% on April 4, down from 2.8% on April 1 (Source: Atlanta Fed) and down from 3.3% in the fourth quarter of 2023 (Source: Bureau of Economic Analysis).

With inflation no longer falling at the pace it once did and core inflation (excluding shelter) having frozen well above pre-COVID levels, rising interest rates may pressure borrowers again, especially small and medium-sized businesses.

A significant unknown is what actions the Federal Reserve will take. They find themselves in an unenviable position of balancing market-anticipated interest rate decreases in 2024, a stronger-than-expected economy, and sticky inflation.

Meanwhile, our international brethren, including the UK, Japan, and Germany, are experiencing recessions. The UK economy met the technical definition of a recession at the end of 2023 with two consecutive quarters of contracting GDP. This dispersion in economic performance across different countries hints that cracks exist in the global economy despite the US economy continuing to perform well.

In a positive development, more stocks are beginning to produce gains outside of the mega-cap technology stocks. Several sectors of the stock market posted double-digit returns for the quarter, including Energy (13.55%), Financials (12.46%), Communication Services (12.76%), and Industrials (10.97%). There were also pockets of strength in select international markets, with India, Japan, and Taiwan all up over 10% (Source: Morningstar).

Large tech company earnings are coming out in the last weeks of April and early May, creating the potential for volatility in the markets. In addition, the potential for a broader Middle East war grows. Short-term market implications and movements are hard to predict, but volatility may rise in global asset prices, particularly in the oil market (Source: Alpinemacro).

As the market weighs its current dynamics, Roehl and Yi will continue to monitor other risks on our horizon, including government spending and the toll debt accumulation is having on the value of our US dollar, consequences of the upcoming US presidential election, and other geopolitical conflict outcomes.

Stock Market

The S&P 500 Index has experienced 22 all-time highs in 2024, returned more than 25% over the past five months, and has gone more than one year without experiencing a single-day 2% decline – the sixth-longest such streak since 1965 (Source: Goldman Sachs).

During the 1st quarter, the Russell 1000 large-cap growth index was up 11.41%, the Russell 1000 large-cap value index rose by 8.99%, and the Russell 2000 small-cap gained 5.18%. Meanwhile, international stocks were up 5.78%,* and the US bond market fell 0.78% for the quarter (Source: Morningstar). Despite another disappointing quarter for the broad bond market, money market funds, T-Bills, and short-term bond strategies all had positive returns of over 1%.

The table below is an overview of market performance for Q1 2024 and includes a two-year look back.

Volatility Penetrates Industry-Leading Stocks
There has been significant dispersion in the “Magnificent Seven” stocks, as shown in the chart below. From October 27, 2023, through March 31, 2024, Nvidia had a total return of 123.1% compared to Tesla’s loss of 15.5%. Apple remained roughly flat during this period, while Meta (+65.6%) and Amazon (+41.7%) have been the other strong performers (Source: Gavekal Research).

“The Magnificent Seven” is an industry term and this is not an endorsement of these seven stocks from Roehl & Yi.

Dividend Stocks and the S&P 500 Index Diverge

As of the date of this publishing, dividend stocks currently look attractive relative to the broad stock market. They may be an opportunity for investors, as shown by the forward price/earnings (P/E) ratios of the S&P 500 Index compared to dividend stocks, using the Schwab Dividend Equity ETF as a proxy.

The two lines tracked closely for most of the period but have varied significantly in the last couple of years. The S&P 500 Index currently has a P/E of over 20 compared to dividend stocks at around 14. Lower P/E ratios can often imply attractive valuations and potentially higher returns going forward (Source: Martin Capital Partners).


Delinquencies Signal Financial Pressure Experienced By Consumers

After remaining flat for most of the prior decade, missed payments are starting to increase for auto and credit card loans, as demonstrated by the percentage of balances in 30-day delinquency. This is something to watch going forward as it may imply the US consumer is experiencing deeper stress (Source: J.P. Morgan).

The Labor Market Outperforms, But Warning Signs Exist

The labor force participation rates for people aged 18-64 have recovered well over pre-pandemic levels, while the total labor force participation remains slightly below the peak (Source: J.P. Morgan).

Overall, the labor market proves sound. However, the March jobs report indicated that the total number of employed persons fell by nearly 400,000 in four months and that 1.8 million full-time jobs disappeared over the same period (Source: Bureau of Labor Statistics).


Economic weak spots may be peeking through the horizon, exacerbated by high government spending. We recommend that you be conservative when investing and avoid engaging in market speculation or chasing performance.

Consider these four suggestions:

  1. Keep a long-term asset allocation position and diversify well.
  2. Maintain healthy cash reserves and consider investing these reserves in money market funds or T-Bills with attractive yields.
  3. Seek out income-oriented investments including high quality, dividend-paying stocks.
  4. Avoid high-interest-rate debt and reduce unnecessary risk.


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As always, we are grateful for your continued trust in Roehl & Yi. Please call us first if you have any questions or concerns about your investments or other financial matters. May you and your family experience happiness and good health.

This report is provided for informational purposes only. Nothing herein should be construed as the provision of personalized investment advice, nor should it be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change without prior notice. Third-party data sources contained herein are for illustrative purposes only and are believed to be reliable, but we take no responsibility as to their accuracy. The newsletter contains certain forward-looking statements that indicate future possibilities. Due to known and unknown risks, other uncertainties, and factors, actual results may differ materially. As such, there is no guarantee that any views and opinions expressed herein will come to pass. Investing involves risk of loss including loss of principal. Past investment performance is not a guarantee or predictor of future investment performance. Any reference to the performance of securities of markets, indexes or specific investments is for illustrative purposes only and does not represent any of R&Y’s recommendations or performance. Any reference to a market index is included for illustrative purposes only as it is not possible to directly invest in an index. The figures for each index reflect the reinvestment of dividends, as applicable, but do not reflect the deduction of any fees or expenses, or the deduction of an investment management fee, the incurrence of which would reduce returns. It should not be assumed that your account performance or the volatility of any securities held in your account will correspond directly to any comparative benchmark index.

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