Economic & Market Review: Q3 2024 [Webinar Summary]

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

Here is the webinar recording from October 16th, 2024. You can browse the 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 on a new screen!

• 00:04 - Introduction and CNBC Recognition
• 02:48 - Q3 Market Performance Overview
• 04:22 - Long-term Market Performance
• 06:48 - Recent Bull Market Analysis
• 12:30 - Election Impact on Markets
• 14:51 - Federal Reserve Rate Cuts and Market Impact

• 16:35 - The Reason for Rate Cuts Is Important
• 20:00 - Rate Cuts Don't Predict Size and Style Phase
• 22:52 - Size and Style Factors in Investing
• 24:20 - Momentum
• 29:24 - Q&A Session

Introduction and CNBC Recognition (00:04)

• Recognized as the number one Financial Advisor in the State of Virginia by CNBC*

• Jumped from number 9 to number 3 nationally

• Reflection of 50 years of commitment to client service

Q3 Market Performance Overview (02:48)

• Recapped the previous decline, but the market has since recovered

• Most asset classes exceeded their typical quarterly averages

• US equities continued to perform well

• Overseas markets had a resurgence

Long-term Market Performance (04:22)

• Reviewed 1, 5, and 10 year performance numbers

• International markets starting to bounce back

• US equity-driven market over the last 10 years

• Encouraging trends for domestic investments

Recent Bull Market Analysis (06:48)

• Bull vs. Bear market context

• The average bull market lasts about 5.5 years historically

• The current bull market is about 2 years in

• Discussed sustainability of current market trends

Election Impact on Markets (12:30)

• Elections have little impact on the stock market

• No significant difference in market performance during election years

• Economic factors more important than election outcomes

Federal Reserve Rate Cuts and Market Impact (14:51)

• Fed cutting rates marks a turning point in the battle against inflation

• Rate cuts don't necessarily favor one part of the market over another

• Context matters more than the rate cut itself

The Reason for Rate Cuts Is Important (16:35)

• Over the last 10 rate cut cycles, the reason for the cut was a recession four times, a growth scare three times, and normalization three times

• When the reason was a growth scare or normalization, the market did well

• When the reason was a recession, the market underperformed

• This is something to keep watching, but Goldman Sachs economists only predict a 20% of recession over the next 12 months

Rate Cuts Don't Predict Size and Style Phase (20:04)

• A falling interest rate environment does not necessarily predict the size and style phase

• There have been both pro-small cap and pro-large cap phases following the first interest rate cut

• That said, Growth stocks outperformed Value stocks in 4 of the last 5 rate cut cycles and that is where we continue to lean today

Size and Style Factors in Investing (22:52)

• Much better stock market breadth in the third quarter
• Smaller companies outperformed larger companies and Value had the edge over Growth
• Sign of a healthy market to see this breadth

Momentum (24:20)

• Momentum has been the best performing factor in 2024

• Definition of momentum and discussion of the academic evidence for the factor

• Consider stock price momentum in your investing strategy

Q&A Session (29:24)

• Addressed questions about the bond outlook

• Discussed potential changes in estate tax laws

• Explored the impact of political tensions on the global economy

• Answered queries about national debt and its effect on markets

CNBC’s annual FA 100 ranking was published on 10/2/2024 for the year 2024.  The Burney Company did not pay CNBC any compensation for being considered for the list, however, Burney Company does pay a licensing fee to use the CNBC logo in marketing materials.  A link to the CNBC selection criteria can be found by going to https://cnb.cx/3Pg6FVh. The CNBC award was given to The Burney Company, the parent company which encompasses nine other Affiliated Portfolio Managers, and not Burney Wealth Management.