Hello everyone! As we dive into the updates from the early stretch of 2024, it’s clear that the economic landscape continues to evolve, presenting both challenges and opportunities. Let's take a moment to review the impressive growth we've seen in the markets and peek into what the future might hold.

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This year started off strong with the S&P 500 soaring to new heights, marking 22 all-time highs in just the first quarter. This robust performance is a testament to the underlying strength and resilience of the market, defying the choppy waters of past years.

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Despite the positive trajectory in stock prices, inflation has been a tricky beast. While it continues its slow descent, the pace has moderated, causing investors and the Federal Reserve to adjust their expectations regarding interest rate cuts. Initially, many anticipated a series of rate reductions, but now, a consensus for fewer cuts seems to align with the current economic signals—namely, a slowing in inflation reduction and a robust economic environment.

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Our economy is proving its durability, especially evident in the housing sector, which has surged to activity levels not seen since before the 2008 financial crisis, even with mortgage rates hovering near a 15-year peak. Consumer sentiment also hit a two-and-a-half-year high in March, underscoring a growing optimism that is fuelled by a tight labor market and rising asset values.

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Interestingly, oil prices have spiked over 20% in the first quarter, a movement that underscores the ongoing demand and hints at broader economic strength.

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In the stock market, after an impressive 11.6% gain in the last quarter of 2023, the S&P 500 continued its strong performance with a 10.4% increase in the first quarter of this year. However, it's noteworthy that small-cap stocks and international markets didn't fare as well, partly because they lack exposure to booming sectors like artificial intelligence, which has been a significant driver in the U.S.

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Turning our eyes to the bond market, it faced some headwinds as rising yields led to price declines. This reflects a shift in investor sentiment as the continued economic resilience suggests less need for the Fed to cut rates.

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Looking ahead, the key themes shaping our investment landscape remain consistent. The economy is expected to continue its expansion, supported by strong fundamentals. Yet, the journey towards the Federal Reserve's 2% inflation target appears to be uneven and challenging.

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As we move forward into the next quarter, it's crucial to stay informed and adaptable. The financial landscape is dynamic, and while we've seen considerable growth and resilience, the path ahead may still hold surprises.

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Thank you for joining me on this financial journey. Let’s keep a keen eye on the developments and strive for continued success together.

– Richard M. Swensson, II

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