Investment Update | Glens Falls National Bank

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Investment Update

By Rick Schwerd | June 7, 2024

Our investment team remains committed to sharing updates and market insights to keep you informed. Please look for our next update on June 21.

Mixed Jobs Report

The U.S. economy added 272,000 jobs in May, nearly 100,000 more than expected. However, the unemployment rate ticked up to 4 percent, its highest level since January 2022. Average Hourly Earnings increased more than expected to 4.1 percent year-over-year. Job gains were focused in health care, travel/leisure and government.

The data reduced chances of a Federal Reserve rate cut later this year, although the possibility remains on the table for now. Bond yields, which had been falling over the last few weeks, immediately jumped this morning following the release of the data.

Nvidia Continues to Surge

The only thing hotter than Aaron Judge and the New York Yankees these days is Nvidia. The company is up 25 percent since its earnings release two weeks ago and is now up more than 140 percent this year. The company is set to complete a 10-for-1 stock split after the market close today. Amazingly, the stock, which currently trades around $1,200 per share pre-split, only crossed the $100 per share level in 2020.

Nvidia has gained more than $1.7 trillion in market value this year alone, larger than the entire valuation of Facebook parent Meta Platforms, Inc. Its valuation crossed the $3 trillion mark on Wednesday, briefly surpassing Apple to become the second largest company in the world by market value. For now, Microsoft remains the world's most valuable company. Nvidia has seen surging demand for its best-in-class high-end chip technology as other firms build out their artificial intelligence (AI) infrastructure.

Stocks Continue to Hit New Highs

With Nvidia leading the way, the S&P 500 and NASDAQ indexes recorded new highs this week. The S&P 500 crossed 5,300 for the first time on Wednesday and is up more than 12 percent this year. The tech-heavy NASDAQ surged past 17,000 and is now up more than 14 percent year-to-date.

Much like last year, mega-cap tech stocks have been the driving force behind the move higher. Even with Tesla down nearly 30 percent this year, the Magnificent Seven stocks (Tesla, Nvidia, Microsoft, Apple, Google parent Alphabet, Amazon and Meta) are up more than 30 percent combined in 2024. The remaining 493 S&P 500 companies are up only a combined 5 percent this year, according to The Earnings Scout.

Value and small-cap stocks have not been able to keep pace this year. The more value-oriented Dow Jones Industrial Average is up only 3 percent this year, under-performing the broad market S&P 500 by approximately 9 percent year-to-date. The small-cap Russell 2000 Index is up just one percent year-to-date as small companies are more impacted by the higher interest rate environment.

As always, if you have any questions or concerns regarding markets or your financial planning needs, please reach out to us at (518) 415-4401.

About the Author: With almost three decades of financial industry experience, Rick serves as a Senior Investment Officer at Glens Falls National Bank. He oversees individual and corporate retirement plans, personal trusts, investment management accounts, foundations and not-for-profit relationships. He is also co-portfolio manager of the proprietary North Country Large Cap Equity Fund.


 

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