As we conclude the third quarter of 2024, the economy continues to grow steadily, yet the balance of risks is shifting. Small cracks have begun to emerge in consumer sentiment, manufacturing, and within the labor market. Employment has now overtaken inflation as the Federal Reserve’s primary concern within its dual mandate as progress on disinflation has been satisfactory, thus paving the way for the Federal Reserve to join the global monetary easing cycle.

Despite some bumps along the way, the 2024 equity market rally remains intact. The healthy broadening out of the market beyond the mega-cap “Magnificent Seven” and “Fabulous Four” companies, has thankfully materialized. Risk assets were broadly supported by ten-year U.S. Treasury yields falling firmly below 4 percent, although interest rate volatility reached some of the highest levels of the year.

It was a quarter of tail-risk events: There were two assassination attempts on former president Donald Trump, Japanese stocks had the worst crash since 1987, before promptly rebounding, military conflict continued to escalate in the Middle East, and Hurricane Helene ravaged the Southeast, as one of the deadliest hurricanes to make landfall on the U.S. mainland in recent history. With the election around the corner in November, we anticipate elevated volatility persisting into the foreseeable future.

The market recently took quite a sudden dip, causing lots of consternation.

• Should we sell?

• Is this the beginning of the end?

• Are we about to enter another Global Financial Crisis?!

Honestly? Markets just go down sometimes and, candidly, it can be healthy … particularly when viewed through the lens of history and rationality.

The second quarter delivered positive returns for investors across almost all major asset classes. Global equities have continued to make new highs, led by the Artificial Intelligence (AI) revolution in the U.S. While consumer and business sentiment has sunk lower throughout the quarter, the narrative for stocks and bonds has been hard to describe as anything but optimistic.

The fundamental supports have all held in:

• The economy is growing.

• Corporate earnings are strong.

• The U.S. labor market is creating still-plentiful jobs.

• Household wealth continues to reach new records.

June marked the seventh winning month out of the past eight for the S&P 500, bringing year-to-date total returns to approximately 15 percent. There are now officially three U.S companies with equity market capitalizations over $3 trillion. Without question, it’s a bull market, but the probability of something going awry is rising. Specifically, signs are mounting for the Fed that restrictive monetary policy is influencing the economy, consumer spending is slowing, and concerns are rising over the political environment as the presidential election approaches.

In today's dynamic landscape, several emerging trends are shaping the way businesses operate and make strategic decisions. These factors have far-reaching drivers and related implications, influencing everything from financial management to talent development.

Most U.S. equity indices more than erased their 2022 slides. The S&P 500 returned 26 percent on the year and the NASDAQ returned a whopping 45 percent, its best year since 1999 as continued economic momentum and an artificial-intelligence frenzy drove technology shares to outsized gains.

An outstanding year for asset returns came despite intensified geopolitical and political uncertainty.