CIO Monthly Observations - December 2024
Monthly Observations
The S&P 500 rallied 5.7% in November, recovering October’s losses and further improving on its year-to-date gains, which are now at +26.5%. The MSCI All Country World index also rose during the month, up 3.6%, which improved its year-to-date return to 18.6%. The Bloomberg BarCap U.S. Aggregate Bond index made back a lot of ground as well, increasing 1.1% on the month, which leaves its year-to-date gain at 2.9%.
The stock market jumped sharply after the presidential election. With much of the uncertainty removed – some House races remain too close to call – and the Federal Reserve continuing to cut interest rates, investors are in an optimistic mood and equities are poised to continue making new records.
Monthly Highlights
The stock market spiked after the election.
Russia and Ukraine exchanged missiles in an escalation of tensions The Federal Reserve cut interest rates again.
News in Review
S&P 500 Has Best Post-Election Day in its History
The S&P 500 jumped 2.5% the day after the presidential election, the largest ever post-election day increase, as uncertainty over the outcome had passed and optimism over potential tax cuts and reduced regulations emboldened investors. Treasury yields moved higher (yields move in the opposite direction of price) indicating some selling in the bond market over concerns that the pro-growth policies, which are good for the stock market, could be a negative for bond investors.
Putin Says Russia Fired New Ballistic Missile at Ukraine
Russia fired a new type of ballistic missile at Ukraine – one which could conceivably carry a nuclear weapon – in response to the US and UK arming Ukraine with the capability to strike across the Russian border. The escalation in the conflict began when North Korea deployed over 10,000 soldiers to Ukraine to fight for Russia. This caused the US to increase the range of the missiles that they had given Ukraine, which further angered Putin.
Fed Cuts Rates for a Second Time This Year
The Federal Reserve cut interest rates by 0.25% in November, calling the cuts a “further recalibration,” noting that the rate of inflation has been falling, although the economy continues to expand. The Fed is concerned about a rapid rise in the unemployment rate and wants to make sure that the economy doesn’t fall into recession, but that interest rates stay high enough to keep the pressure on inflationary forces.
Cemetery Charges Mourners for ‘VIP Pass’ to Visit Dead Relatives
A cemetery in England has done the unthinkable – charging people for a pass to visit the graves of their deceased loved ones. The owners claim it was necessary to buy electric gates that will be closed outside of business hours (9am-3pm, Monday-Friday) and that people can buy passes in order to visit outside of those times. They did promise the cemetery would be open for free during the week, but that didn’t stop the uproar over charging for passes.
DISCLOSURES
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This newsletter was written and produced by the Independent Advisor Alliance, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
S&P 500 INDEX: The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
NASDAQ 100 INDEX: The Nasdaq 100 Index is an unmanaged, capitalization-weighted index of the largest 100 non- financial stocks traded on the Nasdaq market. Unlike the S&P 500 it does not represent all major industries and may be more volatile than more broadly constructed indices.
MSCI ACWI INDEX: The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,495 constituents, the index covers approximately 85% of the global investable equity opportunity set.
Bloomberg U.S. Aggregate Bond Index: The Bloomberg U.S. Aggregate Bond Index is a broad-based index of the U.S. investment-grade, fixed-rate bond market, including both government-related and corporate securities and mortgage- backed and asset-backed securities.
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