H1 Market Round-Up: How Are We Doin'?
By John Persinos
When the colorful Ed Koch (remember him?) was mayor of New York City, he often asked passers-by on the street: "How'm I doing?!" Koch's famous question came to my mind, as the financial markets reached this year's halfway point.
When a landmark such as the end of the first six months occurs, it's human nature to evaluate one's progress. As of this writing, the answer for investors is: We're doin' good.
The stock market thrived in the first half of 2024, amid generally good news on the economic front and the tantalizing hint of a Federal Reserve interest rate cut. Historically, when the first half is strong, the rest of the year tends to be above average too.
With the first half behind us, let's examine the leaders and laggards, and what the trends portend for the second half.
Mega-cap technology stocks continued their reign, buoyed by the artificial intelligence (AI) mania that refuses to quit. Meanwhile, traditionally defensive sectors such as utilities and gold also had a stellar start.
Volatility took a back seat in the first half of 2024, as market swings remained modest. Small-cap equities struggled and underperformed their larger counterparts, due to elevated interest rates and slowing economic momentum.
For small caps to bounce back, we'll need to see easing Fed policies and a pick-up in economic growth. It might take a bit longer, but the groundwork for a small-cap resurgence is there.
Last Friday, the S&P 500 finished the second quarter of 2024 with a gain of 3.9%, setting a new all-time high.
For the first half of 2024, the main indices gained as follows: the Dow Jones Industrial Average +3.8%; the S&P 500 +14.5%; the NASDAQ +18.1%; and the Russell 2000 +0.46%.
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