Doc’s Economic Insights

March 29, 2024


US stocks rose steadily during the first quarter, with the S&P 500, NASDAQ, and Dow indices each setting, then repeatedly resetting record highs.  Growth stocks led the charge during January and February, before relinquishing the lead to Value stocks in March.  The stock market’s strength was impressive, given that multiple reports of higher-than-expected inflation and robust economic activity during the quarter prevented the Federal Reserve from cutting interest rates.  (The expectation that the Fed would cut rates in March had been a catalyst for the stock market’s strong rally during November and December of 2023.)   Bond investors were more cautious.  The yield on the bell weather 10-year Treasury rose from 3.88% at the end of 2023 to 4.21% as of March 28.  (Higher yields mean lower prices for bonds.)

Although the financial markets are likely to become more volatile, we remain optimistic about the stock and bond markets’ long-term prospects.  First and foremost, the US economy is strong and likely to remain so. Second, investment valuations outside of the technology sector are attractive.  For further details on each of these points, please see below.


The Economy:

  • The US unemployment rate remains below 4% and the economy continues to add new jobs each month – suggesting the labor market remains strong.
  • Consumer spending is robust.
  • Although recent reports have shown price inflation hovering near 3%, Federal Reserve governors continue to signal that they expect to lower the Fed Funds rate by 0.75% during 2024.
  • Corporate earnings are expected to grow by 9% or more during 2024.


Investment Valuations:

  • From November 2023 through February of 2024, the stock market rally was driven by a small number of technology stocks.  Many stocks outside this elite group have attractive valuations and investors began to take notice of this in March, contributing to Value stocks outperforming Growth.  This is a great environment for active stock managers.
  • Bonds, having given up a portion of the gains from their fourth quarter rally, are attractively priced.  With the rate of price inflation near the Federal Reserve’s 2% target and the Fed signaling that they will begin lowering borrowing costs, it is likely bonds will appreciate as the year progresses.



This report has been generated from information that Arbor Financial believes to be reliable and accurate. We do not represent or warrant the accuracy or completeness of the information contained in this report. As such, all calculations, estimates, and opinions included in this report constitute our best judgment as of this date and may be subject to change.

Written by

Peter has more than 25 years of experience in the financial industry as a researcher, strategist, and portfolio manager.  As a portfolio manager at Arbor, Peter performs quantitative analysis on current and prospective portfolios.

Peter is a CFA charter holder.  He earned his PhD in Economics as well as dual Bachelors of Science degrees in Computer Science and Pure Mathematics from the University of California, Santa Barbara.

Before joining Arbor, Peter was a Founding Member of institutional money manager OakBrook Investments and worked there for 22 years serving in a variety of roles including portfolio manager, Director of Research, and co-Chief Investment Officer.  Prior to forming OakBrook, Peter worked at ANB Investment Management & Trust Company as a strategist, portfolio manager, and Head of Research.

Peter has lived in Lisle, Illinois since 1997.  Outside of work he enjoys sports car racing and is an active member of the Autobahn Country Club in Joliet, Illinois and the Sports Car Club America (SCCA).