Gateway Financial Partners

ECONOMIC UPDATE

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March 2024 | Monthly Economic Update

Source: FactSet

Equities had a strong month in February, with all major regional indexes posting positive returns. US equities gained 5.3%, supported by resilient economic data and positive earnings results. International developed equities were relative underperformers with the region’s less rosy growth outlook, returning 1.8%. Emerging markets returned 4.8%, with gains driven primarily by China. China gained 8.6% in February, rebounding strongly after a rough start to the year due to supportive measures taken by the Chinese government and an uptick in recent economic activity.

Looking across US sectors, economically sensitive sectors were the top performers as economic results continued to come in strong. Consumer discretionary and industrials were the top performers, gaining 8.7% and 7.2%, respectively. Defensive sectors were the relative underperformers, with utilities and consumer staples at the bottom, returning 1.1% and 2.3%. Equity size and style performance generally reflected the sector results, with growth equities outperforming value and large and midcaps outperforming small.

Fixed income continued their 2024 struggles, with major markets seeing more declines. In the US and developed international markets, higher inflation, and stronger economic results led to more repricing of bonds as investors anticipated further delayed or reduced interest rate cuts by central banks. Emerging market bonds eked out a modest return of 0.4% with their greater exposure to credit. High-yield and short-duration bonds were favored, while more interest rate-sensitive, longer-duration bonds underperformed for the month.

Commodities fell for a second straight month to start the year, declining -1.5% as gas and agricultural prices continued to drop. Gold fell a modest 0.2% in response to the US dollar strengthening over the month. Despite real estate’s interest rate sensitivity, US REITs saw a 2.1% gain, with the overall strength of the economy helping to lift equity markets broadly. For general public use. 1 AssetMark | Traditional balanced portfolios recovered from a negative start to the year, with the global 60/40 blended index gaining 2.1% in February. Equities were the primary contributor to the blended index’s gains, while fixed income reduced returns. Exposure to US REITs helped portfolios, while commodities and gold detracted from returns.

Source: FactSet

The Monthly Riddle

What goes in the water red, and comes out black?

LAST MONTH’S RIDDLE: What 3 positive numbers give the same result when multiplied and added together?

ANSWER: 1, 2, and 3

Tip of The Month

As tax season nears, reviewing and potentially maximizing IRA contributions could help in managing taxable income and planning for retirement.

Important Information
This is for informational purposes only, is not a solicitation, and should not be considered investment, legal 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. Investors seeking more information should contact their financial advisor. Financial advisors may seek more information by contacting AssetMark at 800-664-5345.

Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss. Actual client results will vary based on investment selection, timing, market conditions, and tax situation.

It is not possible to invest directly in an index. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Index performance assumes the reinvestment of dividends.

Investments in equities, bonds, options, and other securities, whether held individually or through mutual funds and exchange traded funds, can decline significantly in response to adverse market conditions, company-specific events, changes in exchange rates, and domestic, international, economic, and political developments.

Bloomberg® and the referenced Bloomberg Index are service marks of Bloomberg Finance L.P. and its affiliates, (collectively, “Bloomberg”) and are used under license. Bloomberg does not approve or endorse this material, nor guarantees the accuracy or completeness of any information herein. Bloomberg and AssetMark, Inc. are separate and unaffiliated companies.

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