Reflecting on the Past Quarter

It’s often said that time passes quickly when you’re enjoying yourself. For equity bulls, the first quarter of 2024 certainly flew by. Despite challenges like higher interest rates, regional banking concerns, and geopolitical tensions, major U.S. indices have shown impressive gains, with the Nasdaq 100 ETF (QQQ) and the S&P 500 Index ETF (SPY) leading the charge with approximately 10% growth each. The bull market is showing its resilience by climbing what can best be described as a metaphorical “wall of worry.”

As investors, it’s easy to focus on the present or look to the future to make financial gains. However, looking back at past trends can also yield valuable insights as they tend to persist longer than expected. With that in mind, let’s delve into three key takeaways from the first quarter of 2024.

Tech Continues to Shine, Energy Makes a Comeback

The technology sector maintained its dominance from 2023 and remained a major force in Q1 of 2024.

Image Source: FinViz

Here are some key points:

·       The technology sector outperformed all others, with a solid gain of 12.11%.

·       Financials held the third position in sector performance despite concerns in regional banking and commercial real estate.

·       Real estate fared poorly due to the Federal Reserve’s policy of “higher for longer” interest rates.

·       Sectors like energy and basic materials, often referred to as “old economy” sectors, started slow but made a strong comeback in the final month of the quarter.

S&P 500 Demonstrates Uncommon Strength

The S&P 500 Index achieved back-to-back 10% quarterly gains, a rare feat that has only occurred eight times since 1950. This exceptional performance is a positive sign for investors, as historical data suggests continued strength. Looking at past trends, the S&P 500 Index has seen an average gain of 12.3% a year later, with only one instance of a slight dip in performance.

Image Source: Ryan Detrick, Carson Research

Market Winners & Losers

The AI Revolution continued unabated, with companies like Super Micro Computer (SMCI) witnessing staggering growth of over 200% after announcing strong earnings early in Q1. Crypto-related stocks, such as MicroStrategy (MSTR) and Coinbase (COIN), soared following the approval of Bitcoin ETFs like the iShares Bitcoin Trust (IBIT).

However, Tesla (TSLA) faced a slump of nearly 30% due to increased competition in China and rising interest rates. Boeing (BA), on the other hand, struggled as safety concerns rattled investors.

In Conclusion

The first quarter of 2024 exemplified remarkable resilience in the face of adversity. Despite challenges like higher interest rates and global tensions, major U.S. indices displayed strength, with the technology sector leading the way.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.