May 2024 Market Watch

May 7, 2024

Market Health Indicator - Current Score

The Market Health Indicator (MHI) measures market health on a scale of 0 - 100, analyzing various market segments such as economics, technicals, and volatility. Higher scores indicate healthier market conditions.

Investors are hoping April showers bring May flowers this year.

Markets struggled to find their footing in April following a relatively strong first quarter. Lingering inflation, coupled with a strong labor market, resulted in further uncertainty regarding Fed rate cut expectations. Investors are looking at September now for a potential first cut, which is later than originally hoped.

Small-cap stocks, being more sensitive to interest rates, were the laggard as the Russell 2000 dropped 7.09%. Large-cap US indices were also negative, with losses of 4.16%, 4.46%, and 5.00% for the S&P 500, Nasdaq 100, and Dow Jones Industrial Average respectively. Overall, interest rate-sensitive sectors trailed behind while more defensive sectors experienced more muted pullbacks.

International markets fared a little better, with mixed results overseas. Developed international stocks followed the US lower, falling 3.41%. However, emerging markets posted a gain of 0.96% as Chinese equities rebounded. Higher commodity exposure helped support emerging market stocks as a whole for the month.

While there was no official Fed announcement in April, interest rates spiked higher as investors pushed back rate cut expectations. The 10-year treasury yield jumped from 4.20% to 4.69%, putting pressure on bonds prices with the aggregate US bond market losing 2.53%. This was the third negative month in the last four as interest rates have remained a headwind so far in 2024. Despite the recent fluctuations, bonds are in a more favorable position moving forward than they were going into the year. Higher interest rates result in higher income payments, which should provide more stability once the Fed’s path becomes more clear.

It’s never enjoyable to see a pullback in markets, but the strong start to the year helped provide a cushion for April’s volatility. Equities are still broadly positive in 2024, while bonds remain just modestly negative. Even in a bull market, it’s normal to have some dips along the way. This is why having a plan in place can be so important - to help cut through the month-to-month noise and keep focus on the bigger picture.

What time is it on the moon?

We might have an answer in the near future as NASA has been tasked to establish a unified standard of time for the moon.

The space agency is working with other parts of the government to set what will be called Coordinated Lunar Time (LTC) by the end of 2026.

Due to gravitational differences, creating LTC is more complicated than fixing it to a timezone on Earth. Time moves slightly faster on the moon, so some experts say it might need its own atomic clocks.

Furthermore, successful implementation would require other countries to agree on a set measure.

As the space industry continues to expand, a common lunar time zone would help companies synchronize future missions more efficiently.

To the surprise of nobody, research showed college students have been using AI to help write their papers...

Turnitin, an education company that can help detect plagiarism and AI in schoolwork, reported over 22 million papers used some form of generative AI.

Of the papers reviewed, it was determined 11% of them had been at least 20% written by AI.

However, experts say AI detection tools aren’t as reliable as general plagiarism detection services, leading to more false positive reports.

Especially for nonnative speakers, studies have found AI detection tools have a higher false positive rate as choppy sentence flow appears to be more computer written.

With artificial intelligence continuing to move quickly, educators are struggling to find trustworthy solutions to keep up.

Fun Facts

• The Empire State Building in New York was the first building in the world to have more than 100 floors.

• In August 2000, Fortune magazine published “10 Stocks To Last The Decade.” By December 2012, a portfolio containing those 10 stocks lost over two-thirds of its value.

• About a quarter of the bones in your body (52 of the 206) are located in the feet.

• Mother’s Day is on May 12th. Make sure to keep your phone charged - the holiday sees the highest call volumes of the year.