March 2024 Market Update

March 26, 2024

In this March Market Update, our Chief Investment Officer, Brian Andrew, CFA®, examines the latest market trends and discusses their implications for the month ahead.

Key Takeaways:

Stock Market Performance: March saw continued gains in the stock market, albeit with variations across sectors. Momentum stocks, particularly in technology, outperformed broader market averages, driven by strong balance sheets, free cash flow, and the influence of the artificial intelligence theme.
Economic Indicators: Economic updates in March showed mixed signals. While inflation remains above 3%, certain sectors like energy and services experienced significant price increases. The labor market is showing signs of softness, with decreasing average hours worked per week and rising jobless claims.
Government Spending and Deficit: The government continues to run a deficit of over $1.5 trillion, fueled by spending on various programs including infrastructure and domestic chip manufacturing. However, increased debt costs may impact discretionary spending in the future.
Election Dynamics: With presumptive nominees for both parties in the upcoming Presidential election, discussions around fiscal policies, spending, and taxes are expected to intensify. However, the impact of the election on markets is anticipated to be nominal.
Interest Rates and Investment Strategies: Interest rates have risen, impacting borrowers but benefiting bond investors. While higher yields provide income streams surpassing inflation, there’s a suggestion to move cash into longer-dated maturities to capitalize on higher rates. Overall, amid economic uncertainties, reducing portfolio risk and maintaining diversification is emphasized.

We hope you find this video educational and informative. If you have any questions, please contact your Merit Financial Advisor.