January 2024 Commentary: The Size Divide


  • The U.S. economy grew by an annualized 3.3% in Q4 2023, beating expectations. Consumer confidence rose significantly due to lower inflation expectations and a robust labor market, despite some signs of cooling.
  • At their first meeting of the year, the FOMC maintained interest rates at 5.25% – 5.50%, with market expectations leaning towards a first cut after March and a total of six rate cuts in 2024.
  • Markets showed mixed results with the S&P 500 reaching a record high and rising 1.7%, small cap stocks falling 3.9%, and U.S. intermediate-term bonds remaining flat.
  • The S&P 500’s new highs were driven by a handful of large cap stocks, but the broader market remains subdued. Both the equal-weighted S&P 500 and small cap stocks are significantly below their prior peaks, highlighting the importance of diversification amid a divided market.

Read and download the commentary here.

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