LDEM - Looking Back At Equity Factors In Q2 2024 With WisdomTree

2024-07-25 07:40:00 ET

Summary

• The second quarter began with inflation concerns causing a negative return in April, but improved inflation led to a more hopeful market in May and June, with AI and semiconductor stocks leading.
• During Q2, growth, momentum and quality factors performed well in developed markets, while small cap and value struggled in the U.S., and emerging markets saw strong momentum and a rebound in value stocks.
• Looking ahead to Q3 2024, potential catalysts for market broadening include the Federal Reserve’s expected rate cut in September, narrowing earnings growth expectations between major tech stocks and the rest of the market and the resolution of uncertainty from the U.S. presidential election.

By Pierre Debru

After a strong start to the year, markets entered the second quarter weighted by increasing inflation worries. With expectations of the number of Federal Reserve cuts melting in the sun, MSCI World posted a negative 3.7% return in April. However, inflation print improved over the rest of the quarter, leading to a more hopeful tone in May and June. While cuts remain elusive, the new expected date is now September; markets have restarted their march upward. Artificial intelligence and semiconductor-related stocks continued to lead, though, and a broadening of the market remains elusive....

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