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August 5, 2024 - Here are five key takeaways from our second-quarter market update:

1. CAPITAL MARKETS: HighGround's Capstone Fund posted positive returns for the quarter and exceeded its benchmark on a 1-, 3-, 5- and 10-year basis.
• Global markets started the quarter on a negative note due to slower U.S. GDP growth and slightly higher U.S. inflation. However, by the end of the quarter, lower inflation numbers in the U.S. led to a more optimistic outlook regarding the timing of policy rate cuts in the U.S.
• Due to the relative strength of the U.S. economy, the U.S. dollar continued to strengthen during the quarter, rising 1.3% (ICE U.S. Dollar Index).
• The 'Magnificent Seven' technology stocks—NVIDIA, Apple, Alphabet, Microsoft, Amazon, Tesla, and Meta—continued to be the best-performing stocks, driving market concentration metrics to record levels and accounting for 116% of the second quarter’s S&P 500® total return (+4.3%).
• U.S. equities (Russell 3000®) closed the quarter up 3.2%, as investors were encouraged by a resilient economy, weakening inflation and renewed expectations for interest rates cuts later this year.
2. U.S. ECONOMIC GROWTH:  The U.S. economy grew 2.8% during the quarter due to resilient consumer spending and a stable labor market. However, signs of a slowing economy are beginning to emerge, with U.S. manufacturing and services contracting during the quarter on slower business activity and weak demand.
3. U.S. INFLATION: During the quarter, inflation data eased considerably, with headline U.S. inflation, as measured by the consumer price index (CPI), closing the quarter at 3.0% on a year-over-year basis. Likewise, the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures index (PCE), rose 2.5% from a year ago and marked the lowest annual rate since March 2021. Shelter (rent) continues to be the largest contributor to inflation, increasing 5.2% over the last year and accounting for 70% of the total 12-month increase for CPI, excluding food and energy.
4. U.S. LABOR MARKET: The U.S. labor market is beginning to show signs of softening, as evidenced by three consecutive months of increasing unemployment rates, ending the quarter at 4.1%, its highest level since 2020.
5. GLOBAL ECONOMIC GROWTH: Global economic activity during the quarter was muted, as global manufacturing contracted, with weakness in Europe partially offset by improvements in some regions of Asia.

If you have any investment questions, call our expert team today at 214.978.3300.