As of September 30, 2024

MARKET REVIEW

US stocks reach record highs despite a spike in volatility not seen since the COVID pandemic during the quarter. A big rate cut from the Federal Reserve, falling inflation, and optimism around the strength of the US economy also drove a notable rotation in winners during the quarter. The AI-driven stock market fever broke, and market leadership shifted towards favoring small caps undervalued stocks like dividend payers and real estate. Across the pond, emerging market stocks rose to their highest levels in two and half years. The rally was led by China following stimulus from its central bank to help its ailing property market.

All sectors in the S&P 500, with the exception of Energy, posted gains. Interest rate-sensitive sectors such as Utilities and Real Estate led the pack with gains of 19% and 17%, respectively.

Across size, we saw a rotation into small-cap stocks for the quarter based on optimism that the economy was strong enough to avoid a recession. Within style, value stocks beat growth as investors questioned whether the heavy spending on AI for technology stocks would actually pay off.

Interest rates fell considerably, leading to strong returns for bonds across the spectrum marking a sharp uptick for year-to-date bond returns. The yield on the benchmark 10-year US Treasury note, which falls when prices rise, dropped to 3.8% from 4.3% at the end of June, reversing a two-quarter streak of rising yields.

Finally, across other asset classes, gold gains and oil falls. Weakening demand sent oil lower despite ongoing geopolitical risks. Gold, traditionally perceived as a safe haven, has climbed roughly 27% this year, outperforming the S&P 500 with gains of 22%. The gains have come as demand for gold remains high from central banks, including China, Turkey, and India, looking to diversify away from the US dollar in addition to other investors concerned about the size of the US deficit and the stability of the US dollar over the longer term.

This report is for informational purposes only, and is not a solicitation, and should not be considered as investment or tax advice. The information has been drawn from sources believed to be reliable, but its accuracy is not guaranteed, and is subject to change. Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Asset allocation alone cannot eliminate the risk of fluctuating prices and uncertain returns. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. No investment strategy, such as asset allocation, can guarantee a profit or protect against a loss. Actual client results will vary based on investment selection, timing, and market conditions. It is not possible to invest directly in an index. This material was created by AssetMark, an independent third-party.

Gracio Garcia is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS) 160 Gould Street, Suite 310, Needham, MA 02494, (781) 449-4402. Securities products/services and advisory services are offered through PAS, a registered broker-dealer and investment advisor. Field Representative, The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is a wholly-owned subsidiary of Guardian. The Bulfinch Group is not an affiliate or subsidiary of PAS or Guardian. Life insurance offered through The Bulfinch Group Insurance Agency, LLC, an affiliate of The Bulfinch Group, LLC. The Bulfinch Group, LLC is not licensed to sell insurance. The Bulfinch Group is not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. CA Insurance License #0K24081; FL Insurance License #P179788. PAS is a member FINRA, SIPC. 2024-178144 Exp 8/26