From the Desk of Dale Crossley and Evan Shear

I hope this newsletter finds you and your loved ones well. The markets were off to a strong start the first quarter of 2024. In fact, during the first quarter of 2024, the S&P 500 climbed an impressive 10.6%. As always, we’re watching some events that may or may not impact the markets during the rest of 2024 – recent geopolitical developments, federal monetary policy decisions, and of course, 2024 is an election year. That’s precisely why we develop long-term financial plans to ensure you have well-balanced portfolios designed to help mitigate losses during the inevitable ups and downs in the market.

Holding the line on interest rates

The Federal Reserve's recent decision to maintain interest rates can send some uncertainly throughout financial markets, often sparking a flurry of reactions from investors and institutions alike. With the Feds continuing to opt not to reduce interest rates, it signals that the central bank deems the economy stable enough to withstand current conditions without the stimulus of lower rates. While some market sectors react to the growth and stability this represents, other sectors are affected. For example, sectors that typically benefit from lower borrowing costs, such as housing and manufacturing, may suffer from decreased consumer spending. Overall, the Federal Reserve's continued position of not reducing interest rates can prompt reactions across various sectors and markets. Ongoing inflation will continue to impact this.

Geopolitical Events

Recent geopolitical events in Israel and Gaza, as well as the ongoing conflict in Ukraine, can significantly impact global financial markets due to their potential to escalate tensions and disrupt regional stability. In the case of Israel and Gaza, heightened violence or the prospect of prolonged conflict can lead to increased uncertainty in the Middle East, a region crucial for global energy markets. Any disruption in oil supply from the area could lead to price spikes, impacting energy-sensitive sectors and potentially causing volatility in equity markets worldwide. As the Ukraine conflict continues, it has implications for markets beyond the region, particularly in European markets. Concerns about potential economic sanctions, trade disruptions, or heightened geopolitical tensions between major powers could impact global economic growth prospects.

The 2024 Election

Lastly, the 2024 election cycle can have a significant effect on the financial markets due to the uncertainty and potential policy changes associated with a new administration or changes in congressional leadership. Leading up to the election, market participants may exhibit heightened caution as they assess the potential impact of different electoral outcomes on various sectors and industries. During election years, market volatility often increases as investors react to changing political dynamics and policy proposals put forth by candidates. Uncertainty about future government policies regarding taxes, regulations, trade, and fiscal stimulus can lead to fluctuations in stock prices, bond yields, and currency exchange rates. Additionally, specific sectors, such as healthcare, energy, and financial services, may be susceptible to election-related developments due to potential changes in regulatory environments or government spending priorities.

Monetary policy, geopolitical events, and politics, among other factors, will always create ups and downs in the markets. Although we have an eye on these events and others, our role is to create diversified financial plans that help position your investments well for the long term. If you haven’t already scheduled a yearly appointment to discuss your portfolio, please do so at your earliest convenience. It’s the best time for us to discuss any changes in your circumstances and rebalance your portfolio, but it’s also a regulatory requirement. You can schedule an appointment here.

Any opinions are those of CrossleyShear Wealth Management and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. All opinions are as of this date and are subject to change without notice. Past performance is not a guarantee of future results.