Economic Update and Outlook for Quarter 2 – 2024

Our research partners, Innova Asset Management, have released their Quarter 2 – 2024 Market Commentary report.

Here’s a quick look into the dynamics that shaped the financial terrain:

– In January, expectations for rate cuts in the US were highly optimistic and unrealistic. Many expected the first rate cut to happen as early as March, with 6-7 cuts of 0.25% each predicted for 2024.

– This optimism helped boost equities, but as the quarter progressed, the expected date for the first rate cut was delayed, and the number of expected cuts significantly reduced.

– Since October/November 2023, consumer sentiment has improved, reflecting a more positive economic outlook. Positive economic data, especially from the US, has led to increased optimism, higher bond yields, and a new “reflation” narrative for 2024.

– While GDP growth revisions have been positive, there are concerns about sustainability. Consumers have shifted from spending excess savings to using credit cards, which isn’t sustainable long-term. However, increased household wealth has made this more manageable, creating a “wealth effect” that benefits consumers.

– Among 55 managers in the HUB24 Balanced SMA universe, three of Innova’s portfolios ranked in the top five for performance in March. Over a three-year period, three of our portfolios remain in the top ten performers.

Watch the full video breakdown below, or read the attached commentary here on the current key issues, a comprehensive review of Quarter 2, and how we are positioning our Innova Active portfolios for clients.

What has happened in markets | Q2 2024

Market outlook & positioning | Q2 2024