Market Commentary
First Quarter 2025 Commentary
Stocks fell in the first quarter after two consecutive years of gains exceeding 20% in U.S. equity markets. The S&P 500 reached an all-time high in mid-February. However, sentiment shifted later in the month amid rising policy uncertainty in Washington, and the S&P 500 ended the quarter down.
Fourth Quarter 2024 Commentary
There was no shortage of market-moving events in Q4. The stock market opened the quarter with a slow start in October, but the outcome of the presidential election triggered a broad rally in November. Though the rally faded as the year ended, Q4 capped a remarkable run for U.S. investors, as the S&P 500 delivered 20+% in back-to-back years. As noted in the chart below, this run is reminiscent of the 4-year stretch from 1995 to 1998, and like the late 1990s, large-cap technology stocks played a major role in the S&P 500’s gains.
Third Quarter 2024 Commentary
With a soft landing in sight, equity markets marched higher over the third quarter, punctuated by quick downdrafts in early August and September. As they say, “bull markets often climb a wall of worry,” and despite the volatility, the S&P 500 set multiple new all-time highs in the third quarter, adding to its list of new highs from earlier in the year.
Second Quarter 2024 Commentary
One theme that defined equity market performance in Q2 and 2024 YTD was narrow leadership, no matter how one sliced it — the S&P 500 index gained +4.4% in Q2. In contrast, the Russell 2000 index of small cap companies fell by -3.3%. Even in Emerging Markets, the MSCI EM index (+4.1%) was narrowly driven with over half the returns coming from two stocks, TSMC and Tencent.
First Quarter 2024 Commentary
Equity markets continued their upward trajectory in early 2024. The S&P 500 returned more than 10% for a second consecutive quarter, setting multiple new all-time highs along the way. Meanwhile, fixed income markets wavered. Notably, this quarter saw a significant shift in sentiment, as investors now only expect three interest rate cuts in 2024 as compared to six at the start of the year. This change in expectations came as inflation progress slowed and the U.S. economy continued to expand despite higher interest rates, both of which signal a need for fewer rate cuts.
Fourth Quarter 2023 Commentary
Financial markets underwent a sizeable shift in the fourth quarter. Treasury yields, which spiked in Q3, precipitously dropped as inflation eased and the Federal Reserve hinted at interest rate cuts in 2024. The Fed’s telegraphed “pivot” and the continued deceleration of inflation unleashed a melt-up rally across both equities and fixed income: the S&P 500 gained +11.7% during the quarter, and bonds produced their best quarterly return since Q2 1989 (+6.8%).
Third Quarter 2023 Commentary
Stocks and bonds alike suffered in 3Q driven by a strong increase in real rates over the quarter which continued into October. Meanwhile, real assets and the broad commodity complex were up over the same period. The sharp rise in yields was a big development during the quarter. As seen in the below chart, the 7-year yield rose 0.64% during the quarter, while the 10-year and 30-year yields both rose by more than 0.75%.
Second Quarter 2023 Commentary
The first half of 2023 could be described as a tale of the “haves and the have-nots.” The U.S. equity market was up 16.9% in the first half of 2023 and yet firmly bifurcated, as the index gains were driven by a small handful of mega cap tech stocks. The tech sector continued its rebound with the Nasdaq 100 returning +15.3% in Q2 after its +20.7% Q1 return. The Nasdaq’s +39.1% return year to date is the strongest first half year return since 1983. Meanwhile, financial stocks remained depressed from the turmoil in regional banks that occurred in March.
First Quarter 2023 Commentary
Despite turmoil in the banking industry in the early weeks of March, global equity markets rallied in Q1 with the S&P 500 and MSCI ACWI up 7.5% and 7.3%, respectively. The end point is a bit perplexing since markets had to digest the 2nd largest bank failure in U.S. history and the shotgun marriage of Credit Suisse and UBS.
Fourth Quarter 2022 Commentary
Despite the lack of a Santa Claus market rally, equity and fixed income markets found some relief during the 4th quarter. U.S. equities were up 7.6% and fixed income increased 1.9% to cap an otherwise horrid year for investors in public equity and fixed income markets.
Third Quarter 2022 Commentary
Financial markets in the third quarter of 2022 were unsettled and volatile. While the Federal Reserve marched rates higher at a steep clip, trends for both equity and credit markets changed multiple times intra-quarter as investors reacted to data and repositioned portfolios.
Second Quarter 2022 Commentary
The second quarter of 2022 was marked by a rapid increase in interest rates in response to elevated inflation readings and a steep fall in market multiples. These market dynamics led to a number of “historic” data points to the chagrin of both equity and credit investors.
First Quarter 2022 Commentary
There was no shortage of macro themes to dominate the headlines in the first quarter of 2022 with inflation rising to 40-year highs, the Federal Reserve’s first interest rate increase since December 2018, and the brutal invasion of Ukraine by Russia.
Fourth Quarter 2021 Commentary
Strong returns in U.S. equity markets reigned throughout the year outpacing international markets.
Third Quarter 2021 Commentary
Global equity markets treaded water over the third quarter, rising in July and August only to give it all back — and more — in September.
Second Quarter 2021 Commentary
Interest rate gyrations and inflation worries drove market trends in the first half of the year.
The New Republic Partners Market Commentary is published quarterly and authored by members of the firm’s investment committee:
Samuel B. Bowles, Managing PartnerMichael P. Phipps, Managing Partner
Thomas K. Hoops, Managing Partner
J. Keith Benedict, CFA, Chief Executive Officer, South Summit Capital
Nirav D. Kachalia, Senior Advisor
Alexandra A. Bayler, CAIA, Managing Director
