First Quarter 2024 Review – Looking Forward

March closed out the first quarter in strong fashion. The Russell 2000 led the month’s positive performance charge, and both the S&P 500 (best Q1 since 2019) and DOW outperformed the NASDAQ. The broadening out of the market continued. The Magnificent 7 traded down for the last week in March in quarter-end rebalancing.

Q1 earnings will begin reporting April 12th, starting with the banks. S&P 500 Earnings growth is projected at 3.6%. Economic growth continues to broaden out and recession risks remain low. Energy had a big month and led sector performance at +10.7%, followed by Materials +6.3% and Financials +5.0%. Consumer Discretionary lagged for the month at +0.1%, followed by Real Estate +1.1% (still negative YTD) and Technology +2.2%.

S&P 500:                                  Mar +3.10%                  YTD +10.16%

DOW:                                          Mar +2.08%                 YTD +5.62%

NASDAQ:                                Mar +1.79%                  YTD +9.11%

Russell 2000:                    Mar +3.31%                   YTD +4.66%

Sector Performance YTD:

Communication Services +15.6%

Consumer Discretionary +4.8%

Consumer Staples +6.8%

Energy +12.7%                   

Financials +12.0%

Healthcare +8.4%

Industrials +10.6%

Materials +8.4%

Real Estate -1.4%

Technology +12.5%

Utilities +3.6%

Current U.S. Treasury Yields:

6 Month Bill              5.30%

2 Year Note              4.68%

5 Year Note              4.33%

10 Year Note            4.34%

30 Year Note            4.49%

The Fed and the Economy:

China’s economy is improving as factory activity expanded for the first time in six months. Real estate is still problematic. Japan’s economy is slowing. Factory output fell. Wage pressures, due to labor shortages, is impacting business hiring after two years of continued wage hikes.

The UK is anticipating GDP in 2024 to be less than 1% as they emerge out of 2023’s recession. In the Eurozone, inflation is expected to be 2.4% for March, down from 2.6% in February. June is targeted for their first rate cut according to the ECB. Germany continues to struggle with projected growth at 0.1%. Global issues are in the picture and could be disruptive.

The ISM Manufacturing gauge topped expectations. U.S. manufacturing expanded for the first time in almost a year and a half. The index rose to 50.3, which was up 2.5 points from February’s 47.8 print. Housing construction and employment have held up well. Home sales are struggling while homebuilding remains respectable.

Core PCE (personal consumption expenditures price index, excluding food and energy) increased +2.8% on a 12-month basis in February. This was essentially in-line with estimates and +0.3% from last month. The job growth number increased 303,000 for March, besting the consensus estimate of 200,000. The unemployment rate retreated to 3.8% and wages rose 0.3%.

The Fed has been pressured to signal when and how many rate cuts are planned. The response has moved markets but has been the same…sometime in 2024 is on the table. The dreaded recession is at least deferred out into the future. Fed Chair Powell said that despite the recent data the picture is unchanged. Powell noted it can be bumpy while heading towards the key 2% inflation target number. We’ll hear from Fed Chair Powell on May 1st.

Looking Forward:

Markets in April tend to trade well, historically, when the market is on the plus side for the first three months. With this backdrop, since 1950 the average April gain is 1.8% with a Q2 gain of 3.1%. A 9.8% gain for the rest of the year has been the average.

The sector performance continues to broaden out from just Technology. Energy and the Materials sectors have picked up. Corporate EPS is estimated to rise +11% in 2024 and +13% for 2025. Solid earnings, decent comparisons Year-over-Year and the improving market breadth supports the bullish sentiment.


Equities, short-term U.S. Treasuries, and cash (there is still $6.04 trillion in Money Market Funds) will continue to work in 2024. We expect the positive market to continue and remain cautiously optimistic.

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Founded in 1976, Garrett Nagle & Company is a boutique investment management firm specializing in managing portfolios for high net worth individuals and institutions. Based in Woburn, Massachusetts, our portfolios are separately managed and customized according to each client’s individual risk tolerance and return objectives. The firm is a Registered Investment Advisor with the SEC.

Founded in 1976, Garrett Nagle & Company is a boutique investment management firm specializing in managing portfolios for high net worth individuals and institutions.


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