ARGNF - Artisan Mid Cap Fund Q2 2024 Commentary

2024-07-23 10:30:00 ET

Summary

• In Q2, data pointed to solid US economic activity and a sturdy labor market while inflation moved slowly toward the Fed’s 2% target.
• Global equity market results were mixed. Large caps furthered their advance as mega-cap technology platforms continued to dominate market returns.
• Following a strong period of relative and absolute performance in Q1, our portfolio generated a negative absolute return and underperformed the Russell Midcap Growth Index in Q2.

Investing Environment

In Q2, data pointed to solid US economic activity and a sturdy labor market while inflation moved slowly toward the Fed’s 2% target. Recent indicators showed Q1 gross domestic product (GDP) grew at an annualized rate of 1.6%. In a further sign of economic resilience, the labor market remained more robust than many expected, adding 272,000 new jobs in May versus the 190,000 consensus estimate. The unemployment rate has been at or below 4% for 25 consecutive months for the first time since the 1960s.

Inflation has eased over the past year but remains elevated. The consumer price index (CPI) was flat in May and up 3.3% from a year earlier. The latest core personal consumption expenditures (PCE) price index reading was 2.6%, the lowest annual rate in three years. While both metrics show progress, they are still well above the Fed's target, and the Federal Open Market Committee (FOMC) held rates steady in June. Should inflation continue to moderate, we can likely anticipate the FOMC’s first rate cut will come later this year. However, the Fed is assessing data one month at a time, and any upward inflation surprise could push rate cuts further down the road....

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