---
title: "Economic & Market Review: Q2 2024 [Webinar Summary]"
description: Here is the webinar recording from July 10th, 2024. You can browse topics discussed and main takeaways using the sections and time stamps below.
---

[Blog | Burney Wealth Management ](https://burneywealth.com/blog)

# [Economic & Market Review: Q2 2024 [Webinar Summary]](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary)

 Written by [Andy Pratt, CFA, CAIA](https://burneywealth.com/blog/author/andy-pratt-cfa-caia) | 7.16.2024

*Presenters: Andy Pratt, CFA, CAIA, and Adam Newman, CFA, CFP®, MT, RICP®*

Here is the webinar recording from July 10th, 2024. You can browse topics discussed and main takeaways using the sections and time stamps below:

*Click the time-stamp in each section title, and you will jump right to that part of the video in a new screen!*

- [1:05 - Quarterly Market Summary](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#quarterly-market-summary)
- [2:06 - Long Term Market Summary](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#long-term-market-summary)
- [6:08 - Institutional Sentiment](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#institutional-sentiment)
- [8:06 - Waiting for Volatility](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#waiting-for-volatility)
- [8:57 - A History of Market Ups & Downs](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#history-of-market-ups-and-downs)
- [14:44 - Returns During & After US Election Years](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#returns-during-after-election-years)
- [17:33 - Mega-Caps Strike Back](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#mega-caps-strike-back)
- [20:29 - Mega-Cap Outperformance Trend is Nothing New](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#mega-cap-outperformance-trend)
- [23:21 - Momentum Shifting Towards Large-Caps, But more of a True Small-Cap Phase Than at First Glance](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#momentum-shifting-toward-large-caps)
- [25:45 - Strong Growth Momentum Continues](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#strong-growth-momentum-continues)
- [26:50 - Progress on Inflation, Two Cuts This Year](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#progress-on-inflation)
- [28:43 - Live Q&A](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary?hs_amp=true#q-and-a)

## Quarterly Market Summary [(1:05)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=65)

- The second quarter of 2024 was relatively quiet compared to the exciting start of the year, with major asset classes posting fairly average returns.
- Emerging markets were the leading pocket of global equity markets, up about 5%, while the US market was second, up just over 3%.
- The bond market was relatively flat for the quarter.

## Long-Term Market Summary [(02:06)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=126)

- The S&P 500 has hit 36 new all-time highs so far in 2024, which if continued, would result in over 70 all-time highs for the year - close to the record of 77 set in 1995.
- The past few quarters have shown slightly above-average equity returns for the US over the previous 10 years, while returns for the rest of the world have been well below average.
- The bond market has experienced challenges in recent years due to interest rate changes.
- Burney recently [released a piece on their asset allocation model](https://burneywealth.com/blog/the-evolution-of-our-asset-allocation-models), explaining how they approach portfolio diversification and why their approach differs from traditional retirement portfolios.
- Adam emphasizes that periods of good market performance are ideal times to reassess portfolio risk levels and make adjustments if necessary.

## Institutional Sentiment [(6:08)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=368)

- A JPMorgan survey of institutional money managers showed only 17% were looking to add to equity exposure, indicating a lack of frothiness or over-exuberance among institutional investors.
- Both institutional and retail investor sentiment indicators are reading around neutral, suggesting there hasn't been a mad dash towards stocks that is typically expected in the later stages of a bull market.
- The current bull market hasn't caught on with either institutional or retail investors, which may have helped sustain the upward movement in equities as people gradually file in to participate.

## Waiting for Volatility [(8:06)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=486)

- It has been 345 days since the S&P 500 experienced a 2% daily drop, which is an unusually long period of low volatility.
- There have been periods in the past with much longer stretches without a 2% drop, as well as periods of much higher volatility (such as 2020 through the end of 2022).
- Since the bottom of the last bear market, there has been a slow climb in the market with overall fairly muted volatility, coupled with muted investor sentiment.

## A History of Market Ups & Downs [(8:57)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=537)

- Over the past 100 years, the market has been in an uptrend more often than in bear markets (defined as a top-to-bottom drop of 20% or more).
- Approximately 75% of the time, the market is in an upward trend, while the other 25% experiences normal volatility expected for higher returns.
- The current bull market is not overstretched by historical standards, despite ongoing for nearly two years.
- The market has weathered various headlines and global geopolitical events, especially considering it's an election year.
- A 10-15% pullback or correction would be considered normal and healthy in any given year, even when overall returns are strongly positive.
- Andy & Adam's expectation is that the general economic backdrop is still strong, with inflation coming down and both corporations and consumers doing well.

## Returns During & After US Election Years [(14:44)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=884)

- Election years and post-election years typically show strong, if not average, returns for stocks, regardless of which party wins or whether it's a re-election.
- Adam & Andy emphasize that elections themselves, while important to discuss, are not typically intermediate or long-term market movers.
- Burney plans to do a dedicated "election special" presentation at the end of August (August 28th) to discuss investing and the economic climate during an election year in more depth.
- The presenters stress that markets and the economy are incredibly resilient, and it's very difficult for a single person, even a president, to significantly sway the economic machine.

## Mega-Caps Strike Back [(17:33)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=1053)

- The majority of stock market returns in the first half of 2024 have come from the "Magnificent 7" stocks, similar to the trend in 2023.
- There's an extreme 13 percentage point differential between the market cap weighted version of the S&P 500 and the equal weight version over the last six months. NVIDIA alone accounts for one-third of the 15% return in the S&P 500 year-to-date.
- While the Magnificent 7 are dominating, growth stocks are outperforming value stocks across all size levels (large, mid, and small). Mid-growth stocks have performed particularly well, outperforming large value stocks and being the second-best performing area of the market over recent time frames.

## Mega-Cap Outperformance Trend is Nothing New [(20:29)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=1229)

 

- The mega-cap outperformance trend has been consistent throughout the 2020s, with the exception of 2022.
- The current level of market concentration is not unusual when compared to historical data, particularly from the 1950s and 1960s.
- Unlike previous periods of high market concentration (such as the dot-com era), the current mega-cap stocks have strong market fundamentals driving their performance, with impressive earnings growth supporting their valuations.

## Momentum Shifting Towards Large-Caps, But More of a True Small-Cap Phase than at First Glance [(25:45)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=1545)

 

- Recent data shows momentum shifting back towards large-cap stocks, leading to a reset of portfolio targets from 60% large-cap to 70% large-cap.
- Looking at equal-weight indexes rather than market-cap weighted ones reveals that there was actually a more significant small-cap phase than initially apparent. Over the 3 years post-COVID market crash, small-caps had a good run when measured on an equal-weight basis.
- Mid-cap growth stocks have performed particularly well, often outperforming other large stocks and large value stocks. When the strategy shifts away from large-caps, it's often tilting towards mid-caps rather than just small-caps.

## Strong Growth Momentum Continues [(26:50)](https://youtu.be/JqKNaJ_IP6o?si=OC-kEPd_aF-vLkXz&t=1610)

- The momentum for growth stocks has been strong and consistent since early 2023, when the portfolio strategy shifted from value to growth.
- Adam & Andy have a high degree of conviction that they are in the middle of a growth phase, and are maintaining their growth-leaning strategy in portfolios.
- This growth momentum is expected to continue, partly due to the anticipation of the Federal Reserve beginning to cut interest rates, which historically has been bullish for growth stocks.

## Progress on Inflation[(26:50)](https://youtu.be/JqKNaJ_IP6o?si=sBEUJYIDS_xpTYL-&t=1610)

 

- Real-time measures of GDP are showing cooling conditions, which is what the Fed wants to see to help control inflation without causing a recession.
- Recent inflation data has come in softer, indicating that the higher-than-expected inflation readings in the first half of the year were likely short-term anomalies.
- The market is currently pricing in two Federal Reserve rate cuts this year: one in September and another in December. Goldman Sachs predicts this will be the start of a major cutting phase, with the terminal rate potentially reaching the low 3% range as inflation continues to fall.

## Live Q&A [(28:43)](https://youtu.be/JqKNaJ_IP6o?si=yc3JlMSD4qZZJSvX&t=1725)

- Is gold a good investment for portfolios? How can one access gold investments?
- Are gold miners a good investment?
- Does it make sense to invest in gold?
- How does Bitcoin compare to gold as an investment?
- Are there any indicators of an upcoming downturn or recession?
- How are you planning for a potential market downturn?
- Are you making any changes to be more defensive in the portfolio?
- What alternative investments are included in the portfolios?
- How do you handle foreign holdings in asset allocation models?
- What are the implications of potential Fed rate cuts for public fixed income?
- What is your approach to sector rotation?
- How might the upcoming election impact the portfolio?

[View full post](https://burneywealth.com/blog/economic-market-review-q2-2024-webinar-summary)

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