Fed Continues Policy Pivot: The Federal Reserve lowered its benchmark borrowing rate by 0.25% in November, and futures are pricing in a 70% probability that the Fed will cut another 0.25% in December.
Traders Debating How Much Fed Will Cut Next Year: Futures markets have lowered the number of cuts they are expecting next year, leading to an incredibly flat yield curve.
We Could See Increased Rate Volatility: As the market absorbs the results of the election and the policy implications, we could see an elevated level of interest rate volatility.
Equity Markets Rallied After the Election: The S&P 500 was up by almost 6% and reached an all-time high following the results of the election. Small caps performed even better, with the Russell 2000 gaining over 10% for the month.
U.S. Energy Production is at the Largest Surplus to Consumption in History: Thanks to innovation, the U.S. has become the largest energy and oil producer in the world.
The Probability of a Soft Landing has Moved Higher: With inflation falling and the economy continuing to grow, we believe the likelihood of an economic soft landing has increased.
Equity Markets
Following a slightly negative month for stocks in October, equity markets rallied strongly in November following the results of the U.S. Presidential election. The S&P 500 closed the month at an all-time high of 6,032, posting a gain of almost 6% for the month. Small cap stocks fared even better, with the Russell 2000 Index up 11% for the month and now only trailing their large cap peers by 5% for the year. As of November’s close, the S&P 500 price index is higher by 26% in 2024.
One of the most underreported developments in recent years is the significant increase in energy production within the United States. A combination of growth in both petroleum and renewable energy has enabled the U.S. to consistently produce more energy than it consumes. According to the U.S. Energy Information Administration (EIA), since 2019, U.S. total energy production has exceeded total annual consumption. In 2023, Energy production in the U.S. increased by 4% to a record 103 quadrillion British thermal units (quads), while energy consumption fell by 1% to 94 quads. As a result, the U.S. produced 9 quads more than it consumed, marking the largest surplus since the country began tracking energy data in 1949.
Rising Probability of Soft Landing
Rising Probability of Soft Landing
Performance Review & Outlook
Highlights
Equity Markets
Following a slightly negative month for stocks in October, equity markets rallied strongly in November following the results of the U.S. Presidential election. The S&P 500 closed the month at an all-time high of 6,032, posting a gain of almost 6% for the month. Small cap stocks fared even better, with the Russell 2000 Index up 11% for the month and now only trailing their large cap peers by 5% for the year. As of November’s close, the S&P 500 price index is higher by 26% in 2024.
One of the most underreported developments in recent years is the significant increase in energy production within the United States. A combination of growth in both petroleum and renewable energy has enabled the U.S. to consistently produce more energy than it consumes. According to the U.S. Energy Information Administration (EIA), since 2019, U.S. total energy production has exceeded total annual consumption. In 2023, Energy production in the U.S. increased by 4% to a record 103 quadrillion British thermal units (quads), while energy consumption fell by 1% to 94 quads. As a result, the U.S. produced 9 quads more than it consumed, marking the largest surplus since the country began tracking energy data in 1949.
Dreams are important.
Aspirations are what help make goals reality.