Report Summary

Stocks:
Rise +0.29%
S&P -4.17%
NASDAQ 100 -4.4%
DJIA -4.9%
Real Estate:
Rise: +1.18%
Fixed Income:
Rise: +0.83%

Here is our April recap and update on the stock, real estate, and fixed-income markets:

In April, the U.S. stock market experienced a shift after five consecutive months of gains. Sticky inflation reports and a strong labor market report have weighed down on investors’ sentiments on any rate cuts, signalling a “higher for longer” interest rates regime.

Despite the broader market’s downturn in the first quarter, several large-cap companies posted impressive earnings in April. Tech giants like Alphabet, Meta, Google and Amazon reported strong financial performances, exceeding analysts’ expectations.

This positive earnings momentum provided a bright spot amid the market’s decline. However, despite these encouraging signals from first-quarter earnings reports, major U.S. indices closed the month negative. Investors grappled with geopolitical wars in the Middle East, and macroeconomic fears, including worries about inflationary pressures and their potential impact on monetary policy.

The S&P 500 ended the month down by -4.1%, the NASDAQ 100 by -4.4%, and the Dow Jones Industrial Average (DJIA) by -4.9%.

The Real Estate market saw an increase in the number of unsold homes compared to last year, up by 30%. This suggests more activity in the housing market. Despite having more homes for sale compared to the previous month and a slight decline in home prices, mortgage rates for 30-year loans are going up again, showing that there’s still a shortage of homes.

In March, sales of new homes in the US went up 8.8% to 693,000, the highest in 6 months, beating predictions. This is after a 5.1% drop in February. Despite higher mortgage rates, demand for new homes remains strong. 30-year mortgage rates went from 6.91% in March to 7.31% in April 2024, showing there aren’t enough homes for sale in the US. This is because materials and financing costs have gone up, making it hard for builders to construct more houses.

In April, the U.S. bond market remained largely unchanged compared to the beginning of the month. However, inflation was higher than anticipated, diminishing expectations for interest rate cuts this year. As a result, U.S. yields increased further, putting pressure on fixed income assets. The persistent inflation, strong labor market data, and assertive statements from the Federal Reserve led to a significant uptick in U.S. Treasury yields during April. The 10-year yield rose from 4.20% to 4.68% as investors sought its safe-haven characteristics amidst market uncertainties.

Asset Classes Overview

Stocks

The S&P 500 was down -4.17% in April 2024. Our Rise Equity portfolio outperformed the market, closing the month up by +0.2%. Despite the general equity market being heavily down by an average of -4.3%, our Rise Equity portfolio closed positive, buoyed by a strong rally in tech and communications stocks in our portfolio.

We have a diversified stocks portfolio, which has helped us outperform the market and hedge against losses in the event of market downturn. We also retain our bullish sentiment towards the equity market throughout the remainder of the year.

Our base case scenario indicates that the equity market will rebound from the slump in late Q1 2024 and rally into Q2 2024. We expect this rally to be propelled by blockbuster Q1 earnings across our portfolio companies.

Also, during the quarter, we added Nubank – the largest fintech bank in Latin America – to our portfolio. We see the company as fundamentally sound, with impressive growth and an attractive valuation.

In our analysis, the equity market remains a prime avenue for wealth generation in 2024. Our approach continues to revolve around allocating capital to firms with robust fundamentals and financials, capitalizing on the upward trajectory.

Real Estate

Our Rise Real estate portfolio returned 1.18%, aligning with our typical performance. Our returns are influenced by the performance of all our properties.
We’re pleased with this consistency and expect our real estate portfolio to keep providing attractive returns. With high mortgage rates and limited housing inventory, demand for rental properties, including AirBnBs, remains strong. Real estate investment continues to appeal to investors, and we anticipate steady cash flow from our real estate assets.

Fixed Income

Our fixed-income investments at Rise performed well, generating a return of 0.83%. This solid performance underscores the effectiveness and reliability of our fixed-income strategy, providing steady to our investors.

Throughout April, the U.S. bond market strengthened, closing in green and outperforming the equity market with positive returns. Yields remained relatively steady following the hawkish tone from the April FOMC meeting. Despite some initial volatility, yields on the benchmark U.S. 10-year treasury ended the month at 4.68%. This stability in bond yields protected our Fixed-income plan from the larger market uncertainties and contributed to the overall positive performance of our fixed-income investments. 

As always, Rise is committed to helping you achieve your financial goals through thorough analysis and careful selection of investment opportunities. So, stay invested or click here to begin investing.