Market Notebook

2024 PRICE ACTION:
Equity prices, as measured by the ticker SPY, and bond prices, as measured by the ticker BND, closed higher over the last year. SPY turned in an eye-watering 24.89% gain during a year plagued with conflicting fundamental data reports.

SPY    +24.89%
BND    +1.38%

TECHNICAL ANALYSIS:
SPY price appears established in an upward trend.

BND price appears established in an upward trend.

SENTIMENT:
Market participants were bullish on equities and bonds in 2024. It certainly appears that sentiment, more than fundamentals, drove prices in 2024.

ECONOMY AND FUNDAMENTALS:
The U.S. economy performed surprisingly well in 2024 in the face of rate increases by the Federal Reserve. For those quick to criticize the Federal Reserve, the evidence suggests that they did an excellent job in cooling inflation while keeping the economy growing.

THE YEAR AHEAD – 2025
The long-term future for the U.S. economy is bright. Where else in the world do we see such rapid improvements in productive capacity and technological advancements on a continuing basis? Free speech and free economies tend to outperform because free speech and free economies allow for the rapid correction of “errors.” Where thought is controlled, stagnation tends to be the result. As long as people in the U.S. are free to debate the path forward openly, the result will be better and better explanations, the growth of true knowledge, and real economic expansion. The future is bright.

Don’t take my word for it. See the writings of David Deutsch.

All the best during the year ahead!

Disclaimer: Nothing in this discussion should be considered investment advice. The content of this discussion is strictly my personal opinion and subject to change at a moment’s notice. Investment advice can only be provided to you by your investment professional and not by a general market discussion such as this one. If you wish to speak with an investment advisor, contact us. We can probably help.