Markets did their best Bon Jovi impression as we reached the halfway point of 2024.
It’s been a relatively strong year so far as momentum has remained largely positive. However, leadership has been narrow, with larger AI-focused companies driving markets while other sectors are showing more mixed results. The economy has remained fairly robust with a strong labor market, but lingering inflation and Fed rate cut uncertainties have caused consumer sentiment to dip back lower in recent months.
Large-cap US stock indices continued to climb higher in June, with the Nasdaq 100, S&P 500, and Dow Jones Industrial Average posting gains of 6.18%, 3.47%, and 1.12% respectively. However, smaller companies didn’t fare as well with the Russell 2000 falling 1.08%. Cyclical sectors broadly outpaced defensive sectors during the month, with tech leading the way.
International indices continued to trail the US, with various headwinds overseas. Developed international stocks fell 1.65% while emerging markets rose 1.97%. Moves by Chinese authorities to help aid the real estate market provided some support for emerging stocks, but geopolitical uneasiness caused more developed nations to pull back.
While the Fed left rates unchanged in its June meeting, as expected, it left the door open for a potential cut later this year. Markets are pricing in September as the frontrunner, with a 75% probability for a cut at the moment. As investors await further guidance, interest rates continued to retreat from the late-April highs. The 10-year treasury yield dipped from 4.51% to 4.36%, helping aggregate US bonds to a 0.95% gain. This was the second consecutive positive month for bonds, though traditional bonds are still slightly negative year-to-date as rates remain above their end of 2023 levels.
As we head into the second half of the year, it’s as important as ever to remain focused on your longer-term goals and plan. The recent tech rally has benefit broad markets, but markets are cyclical and trends can shift without notice. It’s not unreasonable to expect some elevated volatility in the second half of the year, especially with the upcoming presidential election. Having a plan in place to help dictate decisions can help cut through the short-term noise.
Apparently artificial intelligence is capable of being fired too.
McDonald’s said its pulling the plug on its AI drive-through assistant, which it began in a partnership with IBM in 2021.
The AI-powered voice system was used to greet customers and take orders in more than 100 locations, with the goal of speeding up drive-thru lanes.
While the company didn’t specify exactly why it would be ending the tests, videos posted online showed the experimental tech messing up orders in abnormal ways (think: adding nine drinks to an order after picking up audio from another drive-thru station).
Despite the rollback, it doesn’t mean you’ll never order from a robot again. McDonald’s plans to continue continue exploring AI uses, and other chains like Wendy’s and Panera are looking to expand their AI footprint as well.
What goes up must (eventually) come down…
After finally achieving some positive PR after a string of debacles, Boeing found itself back in the hot seat.
On June 5, the company finally sent two NASA astronauts to the International Space Station. The successful launch came after seven years of delays, and was $1.5 billion over budget.
While this seemed like a much needed boon for Boeing, the trip to space was only half of the journey. Due to leaks in the helium system and malfunctioning thrusters, NASA announced an indefinite delay for the trip to return home.
The astronauts, who were originally slated to spend just eight days at the station, are using the extra time to conduct extended research.
Boeing says the Starliner spacecraft could return immediately in case of emergency, but wants to check all the boxes before giving the green light.
Broad Market Returns
| Asset Class | 1 Month | 3 Month | YTD | 1 Year |
| S&P 500 (VOO) | 3.57% | 4.41% | 15.27% | 24.61% |
| NASDAQ (QQQ) | 6.47% | 8.08% | 17.33% | 30.59% |
| Large Cap Growth (VUG) | 6.78% | 8.79% | 20.78% | 33.13% |
| Large Cap Value (VTV) | 0.15% | -0.88% | 9.35% | 16.58% |
| Small Cap Growth (VBK) | 0.13% | -3.90% | 3.96% | 9.85% |
| Small Cap Value (VBR) | -2.34% | -4.37% | 3.00% | 13.41% |
| Developed International (VEA) | -1.65% | -0.58% | 4.74% | 10.81% |
| Emerging Markets (VWO) | 1.97% | 5.17% | 6.98% | 11.31% |
| REITs (VNQ) | 1.88% | -1.94% | -3.21% | 4.62% |
| Aggregate Bonds (BND) | 0.57% | 0.11% | -0.58% | 2.56% |
| Corporate Bonds (VCIT) | 0.36% | 0.39% | 0.13% | 5.45% |
| High Yield Bonds (JNK) | 0.49% | 0.71% | 2.35% | 9.55% |
| Long Term Treasuries (VGLT) | 1.30% | -1.61% | -4.69% | -5.72% |
| International Bonds (BNDX) | 0.43% | -0.49% | -0.50% | 4.30% |
Market Health Indicator
The Market Health Indicator (MHI) measures market health on a scale of 0 – 100, analyzing various market segments such as economics, technicals, and volatility. Higher scores indicate healthier market conditions.
Fun Facts
- It’s estimated Americans consume 150 million hot dogs on Forth of July. Maybe that’s why July is National Hot Dog Month?
- The world’s shortest scheduled passenger flight is between two Scottish islands, clocking in at less than two minutes on average.
- Only four countries have national anthems with no lyrics – Spain, Bosnia and Herzegovina, Kosovo and San Marino.
- The 2024 Summer Olympics will debut the new events of breaking and kayak cross.
– The Aspire Wealth Team
Weekly Wake-Up