March 2024
Summary
Returns were positive across the board for major global asset classes in March. For large cap developed markets stocks, the close of the first quarter of 2024 marked the 5th consecutive month of positive returns, while for bonds, March offered some welcomed relief after a slow start to the year. The rally was truly widespread; credit continued to outperform, oil broke $80 per barrel, while gold and bitcoin joined equities in touching new all-time highs during the month.
Equities
U.S. small cap stocks led the way for the second straight month, as the Russell 2000 returned 3.6%, while large caps in the U.S. and abroad ended up 3.2 and 3.3% respectively. After a cap-heavy rally to start the year, stock returns were more broad-based in March, as the equal weighted index outperformed market cap weighting during the month. Coupled with a resurgence in small caps, equities may be emerging from AI-mania, with a more diversified set of return drivers and as real economic growth continues to be strong.
Fixed Income
High grade bonds closed the quarter with a positive month, returning just under 1%. The Federal Reserve Board officially announced a pause for their March meeting, a move widely anticipated by the market. All eyes now shift to the Fed’s May meeting for clues as to the case for easing. Inflation remains stubborn (3.2% YoY through February) and a roaring labor market (sub-4% unemployment) has pushed back the timeline for rate cuts. High yield bonds outperformed for the month and have led the way for fixed income markets throughout the first quarter of 2024.
1 – Russell 1000, 2 – Russell 2000, 3 – MSCI EAFE, 4 – MSCI Emerging Markets, 5 – Bloomberg US Agg, 6 – Bloomberg US Long Gov/Credit
7 – Bloomberg US Corporate High Yield, 8 – Bloomberg Gold Subindex, 9 – Bloomberg Commodity
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