Breaking News: Economic Indicators Show Deceleration in First Quarter of 2024

The latest report on first-quarter GDP growth for 2024 revealed a decrease to 1.3% from the previous quarter’s 3.4% growth. Personal consumption expenditures also saw a decline, with a 2% increase in 1Q24 compared to 3.3% in 4Q23. All goods spending dropped by 1.9% in 1Q24 after a 3% rise in the previous quarter. This decrease in spending can be attributed to the effects of multi-year inflation.

Other economic indicators are also pointing towards a slowdown, with April retail sales remaining flat compared to March. US factory orders and durable goods orders increased slightly in April, but industrial production dipped by 0.3%. Capacity utilization was also below its long-run average.

In light of these developments, our forecast for 2024 GDP growth has been revised down to 1.8% from 2%. Looking ahead to 2025, we expect GDP growth to remain in the 2% range.

Despite these challenges, the market is showing strong sector breadth, with seven sectors either tracking or outperforming the S&P 500. Investors are preparing for a potentially contentious election while also anticipating the first rate cut since the beginning of the COVID-19 pandemic.

As part of our quarterly adjustments, we have revised our sector allocations for the third quarter of 2024. The Energy sector has been upgraded to recommended Market-Weight, reflecting stabilized demand and a balance in petroleum supply and demand.

In conclusion, while the economic outlook may be uncertain, staying informed and making strategic investment decisions based on market trends and sector dynamics can help navigate these challenging times. Stay tuned for more updates on the evolving economic landscape.

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