Market Review & Outlook 3Q2024
After the 2024 U.S. presidential election results, the stock market took off like a rocket. There is a lot in that, but the expectation of corporate tax cuts and a more relaxed regulatory environment suggests a strong glide path for the economy. We see a lot of fortunes changing concerning Impact Investing, and while many headwinds have accumulated on the horizon, there are some tailwinds we can use to our advantage. We would avoid interest rate-sensitive areas like Renewable Energy and favor Financial Inclusion’s digital and cryptocurrency focus. Aside from the election, the Federal Reserve has begun an easing cycle, marked by a 50-basis point rate cut in September (and another 25bps in November). However, the pending Republican administration’s likely policies of lower taxes and less regulation suggest inflationary pressures could build and slow the current easing cycle. Still, based on our 45-year analysis of Fed easing cycles, equity markets will likely continue to climb unless the current economic challenges eclipse those of the post-internet bubble burst or the Great Financial Crisis—even beyond the current Trump Bump.
