Looking back on the fourth quarter of 2024, the conclusive outcome of the presidential election—regardless of one’s political preferences—provided clarity which boosted market confidence. 

Most consumers are aware that the price of an item and its value have an imperfect relationship. In a market-based economy, price and value tend to be correlated, but around the edges, they diverge based on consumer preferences.

Q1 2024 continued the steady march higher from the lows of October 2023. As Chart I shows above, the market’s climb maps a saw-tooth path upward and to the right.

“It’s tough to make predictions, especially about the future” is a famous quote from Yogi Berra. We began the year with many predicting a recession of varying degrees, followed by a Federal Reserve rate-cutting cycle that would be welcomed by financial markets. We got neither. 

Since the attempted assassination of Donald Trump, I have been contemplating whether there might be any economic or market implications. In reviewing the stock market’s reactions to political assassinations attempts, I found it to be a mixed bag of performance.

In our last Portfolio Commentary, we shared the Stock Trader’s Almanac data regarding typical presidential election year patterns. At the time, we thought equity markets might follow an Open Field pattern, but we withheld judgement until after the first quarter of 2024.

We think the Federal Reserve will have a tougher time answering that rhetorical question in our headline than Hamlet did trying to answer his.