The Trust Company Investment Committee: (L to R) Grant Kohlmeier, Katie Seay, Michael Carlisle, Preston Schotte, Mark Knackendoffel, & Toby Marks

Second Quarter 2024 Investment and Economic Update 

Despite conflicting data, the U.S. economy performed well in the second quarter. First quarter S&P 500 earnings surprised Wall Street with 79% of its constituents reporting actual earnings above consensus estimates. The market currently estimates second quarter and full year ESP growth of 9%. Small business optimism picked up in June, and consumers continued to show resilience despite quarterly retail sales declines. 

Market Performance and Trends 

The equity markets have shown remarkable resilience despite some volatility. The S&P 500 posted a modest gain of 4% for the quarter, driven by strong corporate earnings and continued investor confidence in key sectors such as technology and healthcare. The NASDAQ outperformed with a 5.5% rise, reflecting robust performance in tech stocks, particularly those focused on AI and cybersecurity. Fixed-income markets experienced slight volatility, with the Federal Reserve signaling a cautious approach aimed at taming inflation while supporting economic growth. The 10-year Treasury yield hovered around 4.5%, reflecting sentiment around monetary policy and inflation expectations. 

Economic Indicators 

The U.S. economy continued to grow at a steady pace. Consumer spending remains a critical driver, supported by a strong labor market and rising wages. Unemployment held steady at historical lows, reinforcing confidence in the economic recovery. Inflation continues to influence both consumer behavior and monetary policy decisions. The Federal Reserve has indicated a data-dependent approach, balancing the need to manage inflation without stifling economic growth. 

Global Economic Landscape 

Internationally, economic activity has been mixed. The Eurozone has shown signs of recovery, although it faces ongoing challenges from energy prices and geopolitical tensions. Emerging markets displayed varied performance, with some regions benefiting from commodity exports while others grappled with inflationary pressures and currency volatility. China’s economic recovery has gained momentum. This resurgence has been fueled by government stimulus measures and a rebound in consumer demand, though challenges such as real estate market adjustments and regulatory shifts remain in focus. 

Investment Outlook 

As we move into the second half of 2024, our outlook remains cautiously optimistic. Diversification remains a cornerstone of our strategy, helping to mitigate risks associated with market volatility and geopolitical uncertainties. Your long-term financial goals remain our priority, and we are committed to providing the guidance and support needed to achieve them. Thank you for your continued trust and partnership.