The last few months have been very enjoyable for long-term investors who have remained disciplined and focused on their goals. The artificial intelligence (AI) theme continues to power the major U.S. stock indexes, and market sentiment remained strong from January through March.

The market has rewarded investors as the S&P 500, Dow, and Nasdaq 100 had their fourth consecutive month of gains. Market bulls were cheering the prospects of a more accommodating Fed at some point, and there were many earnings results in mega-cap growth stocks supporting the positive market sentiment.

For the month of February, the S&P 500 added a healthy 5.17%, the Nasdaq 100 tacked on 5.29%, and the Dow rose by 2.22%.

 

In February, inflation metrics showed data mostly running hotter than expected but stock market bulls didn’t seem to mind. Anticipation of a more dovish Fed
in the future, several strong corporate earnings releases, and an overall theme of bullishness all contributed to the final results in February.

The January jobs report released in early February showed a blowout number with 353,000 jobs created vs 185,000 forecasted, suggesting economic strength.

Inflation warming and the increased probability of any rate cuts being pushed farther into the future contributed to government bond yields rising in February. Inflation is very real, but it affects Main Street a lot more than Wall Street, at least for now.

The widely watched 10-year Treasury Note Yield rose somewhat sharply in February, closing the month at a yield near 4.25%. This constituted a rise of 28.5 basis points month-over-month. The rise in yields naturally translated to higher mortgage rates, contributing to the higher costs of shelter, sidelining some potential borrowers.

February featured continued overall bullish equity market sentiment supported by positive earnings results from many companies. Headwinds exist for equities, but you wouldn’t know it by glancing at the major stock market averages as the S&P 500 and Nasdaq 100 hit all-time highs on March 1, 2024.

 

Long-term investing (staying in the market) continues to be the ticket. That has been the theme of our firm ever since Webb Financial Group was founded by Jerry Webb, in 1981!