Investment Review – June 2024
Welch & Forbes LLC
by Welch Forbes
5d ago
The major U.S. indices all posted strong gains in the month of May, rebounding from the declines seen during April. The Nasdaq Composite increased 7.0%, the S&P 500 added 5.0%, and the Dow Jones Industrial Average rose 2.6%. A combination of strong corporate earnings, especially in the technology sector, and a decline in bond yields led to the positive returns.  Corporate revenues and earnings came in better than expected in Q1. The S&P 500 posted Q1 revenue growth of 4.1% year-over-year and Q1 EPS growth of 8.4%. The healthy gains were driven by the “Magnificent-8” stocks (Alph ..read more
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Investment Review – May 2024
Welch & Forbes LLC
by Welch Forbes
1M ago
The major U.S. stock indices were down in April, with major indices giving back some ground after the notable gains in the first quarter of 2024. The Dow Jones Industrial Average dropped 5.0%, while the S&P 500 decreased 4.2% and the Nasdaq Composite fell 4.4% during the month.  With ~50% of S&P 500 companies reporting results for the first quarter of 2024, 77% have reported a positive earnings surprise and 60% of companies have reported a positive revenue surprise. Meanwhile, the blended earnings growth rate for the S&P 500 stands at 3.5%, this compares to the first quarter ..read more
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Economic Outlook – May 2024
Welch & Forbes LLC
by Welch Forbes
1M ago
At the Federal Reserve’s most recent meeting on May 1st, the Federal Open Market Committee (FOMC) held interest rates steady in a range of 5.25% and 5.50% — its highest level in two decades. The Fed acknowledged the recent inflation setbacks, and signaled its wait and see stance could last well into the year. Fed Chair Jerome Powell also noted that he didn’t think it was likely the Fed would need to consider interest rate increases, and even suggested that rate cuts could begin if the labor market weakened unexpectedly. Separately, the central bank approved plans to slow the pace of reducing ..read more
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Investment Review – April 2024
Welch & Forbes LLC
by Welch Forbes
2M ago
Strong performance in risk assets continued through March, with the S&P 500 posting a +3.10% return, the Dow Jones +2.08%, and the NASDAQ (uncharacteristically in recent quarters) trailing with a +1.79%, for the month.  With quarterly earnings results complete for the year ending 2023, the positive start to the year is little surprise, given strong earnings and economic data. Revenues for the S&P 500 grew 6.2% in Q4 2023, while earnings per share rose 7.6%, both compared to the prior year’s close. Another strong year for business to close 2023. The S&P 500 has experienced a ..read more
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Economic Outlook – April 2024
Welch & Forbes LLC
by Welch Forbes
2M ago
Signs of a slightly cooling job market continue, despite fits and starts in the numbers. Non-Farm payrolls ending in February added 275,000 jobs, far higher than expected, while December and January job adds were revised down after initial postings. More importantly, the unemployment rate jumped from 3.7% to 3.9%, the highest rate since January 2022. Measured labor market rebalancing is underway, as the Federal Reserve pointed out in recent meetings, anticipating moving to 4.1% to close 2025. Wage growth has slowly ticked down, coming in at 4.3% last month. If these labor trends continue, th ..read more
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Investment Review – March 2024
Welch & Forbes LLC
by Welch Forbes
3M ago
Equity indices climbed again in February and now have made gains in four consecutive months. The Dow Jones grew by 2.2%, the NASDAQ advanced 6.1% and the S&P 500 increased 5.2%. New highs are accompanying these moves and the S&P 500 is trading above 5,000.  As the Federal Reserve has sought to rein in expectations for interest rate reductions, yields on bonds rose in February. The yield on the 2-year Treasury increased by 0.41% while the 10-year Treasury yield was higher by 0.29%. When yields rise, bond prices decline. Fixed income returns trailed those for equities during the mo ..read more
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Economic Outlook – March 2024
Welch & Forbes LLC
by Welch Forbes
3M ago
The U.S. economy ended 2023 with growth. Counter to fears of an upcoming recession, we forecast economic growth to continue in 2024. The final reading for fourth quarter (Q4) Gross Domestic Product (GDP) came in at 3.2%, marking the sixth quarter in a row of U.S. GDP growth above 2.0%. Amid low unemployment and wage gains, growth in Q4 was driven by a 3.0% increase in consumer spending, including a strong holiday shopping season. Overall in 2023, U.S. GDP growth was 2.5%. Our forecast for Q1 of 2024 is for an increase in GDP of 2.0% – 2.5%. After Q1, we expect growth to decelerate due to the ..read more
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Investment Review – February 2024
Welch & Forbes LLC
by Welch Forbes
4M ago
Equity markets rose in January as the New Year followed a pattern established last October. The Dow rose 1.2%, the S&P 500 notched a 1.6% increase and the NASDAQ moved 1% higher. The indexes are registering all-time highs amid a strong earnings season and a boom in technology spending. Returns from bonds remained mostly flat, month-over-month, with the persistence of an inverted yield curve. As we approach a Fed rate cut, we are likely going to witness the short end of the curve move down repeatedly. Unlike the Large and Mega-Cap indexes, small capitalization companies pulled back, in ag ..read more
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Economic Outlook – February 2024
Welch & Forbes LLC
by Welch Forbes
4M ago
The widely followed ISM gauge that measures U.S. manufacturing activity rose to 49.1% last month from 47.1% in December, according to the Institute for Supply Management. Economists surveyed had forecast the index to rise to 47.2%. A number below 50% reflects a shrinking economy. Manufacturing has contracted for 15 straight months. Regional manufacturing surveys were very weak in January, but the national ISM index showed some returning vigor. Economists said it will take time before the sector stabilizes even if the Federal Reserve cut interest rates. Timothy Fiore, chair of the ISM’s manuf ..read more
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Investment Review – January 2024
Welch & Forbes LLC
by Welch Forbes
5M ago
The major U.S. stock indices moved higher in December. The Dow Jones Industrial Average increased by 4.8%, the S&P 500 was up by 4.4%, and finally the Nasdaq Composite increased by 5.5%. All things considered a great year for the market, following 2022 when all three major indices had their biggest yearly losses since the financial crisis in 2008. The U.S. stock indices were not alone in having a stellar year. International stocks, as judged by the MSCI EAFE was up 14.8% in 2023 while the Emerging Markets, judged by MSCI Emerging Markets, were the laggard up almost 6.1%. The yield curve ..read more
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