The trend remains unchanged for US Dollar and equities alike – Month in Review: March 2024
Macroeconomic Environment Review
The US dollar strengthened, albeit unevenly, against other currencies in March. We believe this trend will likely continue throughout the year, influenced by central bank actions and global economic conditions. We expect Europe to lead the way in interest rate cuts, with the Swiss National Bank nearing the end of its easing cycle. The European Central Bank is likely to take over due to slowing economic growth and inflation nearing its target. Within the European region, the other central banks will likely follow the ECB’s lead with the BoE in focus. In contrast, the Fed’s rate cut expectations have decreased due to strong economic data and persistent inflation. We believe the Fed will cut rates by a maximum of 50 basis points this year, with inflation remaining stubbornly high. The Bank of Canada will likely follow the Fed, but may ease slightly more due to pressures in its housing market.
The US stock market continued its winning streak in March, marking two consecutive months of strong gains for the S&P 500. This rally wasn’t just for big companies; smaller and value-oriented stocks also participated, highlighting the broadness of the market advance. An important driver for this upswing appeared to be the growing belief that the Federal Reserve would cut interest rates later in 2024. This sentiment was fueled by comments from Fed Chair Jerome Powell, who suggested policymakers were nearing the point where they felt comfortable with inflation’s decline, potentially paving the way for rate cuts. The Fed’s own forecasts, predicting three rate cuts before year-end, further boosted investor confidence and market momentum. While economic data and inflation signals remained mixed, the prospect of lower interest rates in the future seemed to outweigh those concerns and propel stocks higher in March.
Monthly Performance Review
During March 2024, AENAON Syncro Strategies generated the following total returns net of fees:
Across the spectrum of our benchmark indices, our strategies’ performance during March was strongly positive. As a comparison, the US S&P 500 equities index gained 3.10%, the Barclay Hedge Fund Index posted a 1.94% advance, the Barclay CTA Index added 1.94% while the other benchmark indices can be seen on the chart below.
Chart 1: Monthly Performance vs. Benchmark Indices – March 2024
Charts 2, 3 and 4: Inception-to-Date Performance vs. Benchmark Indices
You can always review our updated factsheets at the following Fundpeak links, with monthly performance updates and statistics since inception:
