CIO Monthly Observations - February 2024

Markets in Review

Stocks advanced in January, with the S&P gaining 1.6%. The MSCI All Country World index squeezed out a narrow gain of 0.5% for the month, but the Bloomberg BarCap U.S. Aggregate Bond index dropped -0.3% in January.

The first month of the year was positive for stocks, but not for bonds, as the Federal Reserve indicated that they were going to cut interest rates this year. Typically bond prices go up in the event that interest rates are expected to go down, but concerns about inflation as well as the possibility that economic growth will be stronger than expected, both weighed on bond prices thus far in 2024.

Monthly Highlights

The Consumer Price Index (CPI) averaged 4.1% in 2023

The Fed signaled it was done raising rates and would begin lowering them this year A Boeing 737 MAX had major problems dealing another blow to the jet manufacturer

News in Review

Below are some stories that caught our eye this past month. To learn more, follow the links to the full article.

Rising Shelter, Healthcare Costs Lift US Consumer Inflation

Consumer prices continue to increase, although the rate at which prices are going higher, has been receding. The Consumer Price Index (CPI) rose at a 3.4% annual rate, with the cost of housing and healthcare mentioned as key contributors to the increase. For the full year, inflation averaged 4.1% in 2023, which was around half as much as the 8.0% rate that it averaged in 2022. Fortunately, the labor market remains strong with unemployment claims continuing to fall from their multi-decade highs during the pandemic.

The Federal Reserve Holds Interest Rates Steady but Signals Rate Cuts May be Coming

The Federal Reserve decided to leave interest rates unchanged, but has begun to signal that their next move is likely to be a cut: “If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” according to Fed Chair Jay Powell. While the Chair effectively ruled out a cut in March, markets are betting on a 90% chance of a rate cut at the Federal Reserve meeting on May 1.

FAA to Investigate Boeing After Door Plug Falls Off Alaska Airlines Plane Midair

Passengers aboard a flight from Oregon to California were terrified after a piece of the plane fell off in midflight. Fortunately, the pilots were able to make an emergency landing and all 180 people aboard (including 174 passengers) were returned safely to Portland International Airport. The model of the plane, the Boeing 737-9 MAX, is being investigated by the FAA in order to make sure that other 737 planes don’t have the same type of manufacturing defect.

Disney World Ticket Still Valid After 46 Years

Back in 1978, when the original ticket was sold it only cost $8 (or $40 in today’s money), but the current price to enter the Magic Kingdom at Disney World is $184. One lucky customer was able to enter the theme park at a drastically reduced price and documented the entire attempt for his TikTok followers, although some astute commenters pointed out that the vintage ticket may have been worth a lot more if he had auctioned it off as a collector’s item instead.

DISCLOSURES

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance, a registered investment advisor. Independent Advisor Alliance and Blackbridge Financial are separate entities from LPL Financial. The opinions expressed in this material do not necessarily reflect the views of LPL Financial.

This newsletter was written and produced by the Independent Advisor Alliance, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 INDEX: The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

NASDAQ 100 INDEX: The Nasdaq 100 Index is an unmanaged, capitalization-weighted index of the largest 100 non- financial stocks traded on the Nasdaq market. Unlike the S&P 500 it does not represent all major industries and may be more volatile than more broadly constructed indices.

MSCI ACWI INDEX: The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,495 constituents, the index covers approximately 85% of the global investable equity opportunity set.

Bloomberg U.S. Aggregate Bond Index: The Bloomberg U.S. Aggregate Bond Index is a broad-based index of the U.S. investment-grade, fixed-rate bond market, including both government-related and corporate securities and mortgage- backed and asset-backed securities.

Please note this newsletter contains hyperlinks to additional content. The information being provided is strictly as a courtesy. We make no representation as to the completeness or accuracy of information provided by these websites.