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2024 First Quarter Review and Outlook Thumbnail

2024 First Quarter Review and Outlook

Dear Clients,

Global stocks rallied in the first quarter of 2024, with markets in the US, Japan, Europe, and Latin America hitting all-time highs spurred by stronger than expected economic growth. Consumer sentiment, though still below average levels, improved, cheered by cooling inflation and 12 consecutive months of positive wage growth. International business sentiment picked up, reflecting a surge in orders and manufacturing output. And though markets were led higher by many of the same giant tech companies that dominated in 2023, a wider range of stocks participated in the rally compared to last year, with value stocks posting notably strong returns.

Bond markets, after posting solid returns in 2023, ended the quarter slightly down. The same economic resilience that fueled equity returns was a source of disappointment to fixed income investors. Expectations of slowing growth and imminent interest rate cuts have been put on hold for the time being, as central bankers wait to see whether inflation continues to drop to the desired 2% range in the face of surprisingly robust job gains.


Current economic strength is reducing the likelihood of a recession in the near future.

After being flat last year, corporate profits are expected to grow by 11% in 2024. A surge in immigration is broadening the labor pool, especially in lower income jobs, and prolonging the momentum of the post-pandemic recovery. Households are increasingly tapping into credit lines to fund their purchases, but consumer spending—which makes up 68% of GDP—nevertheless continues to be brisk. Meanwhile residential construction is picking up, retail inventories are in a healthy balance with demand, while state and local government coffers have ample cash to fund both hiring and infrastructure projects. 

The Fed has clearly expressed its desire to “normalize” interest rates, i.e. bring them back down to lower levels, more in keeping with historic averages. Even though strong recent economic data has caused the market to lower its expectations from six Federal Reserve rate cuts in 2024 to a more modest three, the probability of short-term interest rates moving lower later this year remains good.

Such a backdrop of resilient economic growth and moderating inflation, combined with the prospect of lower interest rates, should be encouraging to financial markets.

Stock investors can look forward to strong corporate profits which historically have benefited equities. Fixed income investors, for their part, are getting paid some of the best yields in two decades to lock in returns on medium-term bonds and wait for an eventual drop in interest rates to spark a bond market rally.

Meanwhile, the highest money market, high-yield savings, and CD rates in 23 years have attracted cautious investors who have stashed an unusually large amount of cash in such instruments. It’s worth bearing in mind however, that even with returns of 5% or better, cash underperformed balanced stock/bond portfolios last year. It is also likely to lose its allure quickly if short term rates adjust downwards in response to Fed easing. 

LongView News

We are delighted to announce that Maria Motsinger, our director of Client Services and Operations, became a LongView partner in January of this year. This new role reflects Maria’s importance in the management and leadership of the firm, and we are grateful to be the beneficiaries of her expertise and wise counsel. 

We are also saddened to let you know that Doug Lynam left LongView in March. After many years as a successful author, columnist, and speaker, and with his second book due for publication later this year, Doug has decided to focus on these activities. He is also looking at pursuing graduate studies in clinical psychology to anchor his lifelong interest in people, service, and ministry, within a therapeutic context. 

Finally, with apricot and plum trees blooming around Santa Fe and the snow on the mountains beginning to melt, we look forward to celebrating warmer weather and a spring and summer of community events. On Friday May 3, we will be volunteering for a cleanup of the main arroyo that runs through the Railyard into the Santa Fe River. In June, we will be sponsoring the Santa Fe Pride parade and marching alongside our LGBTQ community. And in September we will host a garden party for our clients at our building on Grant Avenue, featuring a presentation from the New Mexico Historic Women Marker Program about the extraordinary women, many of them previously unacknowledged, who have contributed to making New Mexico what it is today. 

Thank you as ever for your trust. We wish you a beautiful spring and summer.

The LongView Team


This material is intended for education purposes only. LongView Asset Management, LLC (referred to as "LongView") does not warrant that the provided information will be free from error. None of the information provided is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This information should not be relied upon for transacting securities or other investments. Under no circumstances shall LongView be liable for any direct, indirect, special or consequential damages that result from the use of, or the inability to use, the materials provided. In no event shall LongView Asset Management, LLC have any liability to you for damages, losses, and causes of action for accessing this commentary. Past performance is not indicative of future results. This content not reviewed by FINRA.