We’ve got a big election coming up in the United States that’s now less than two weeks away. 

The U.S. stock market continues to claim new all-time highs.  But another segment of capital markets is also glistening brightly as we continue through 2024.

It continues to top the charts as a major downside risk for capital markets as we continue through the 2020s. It sent the markets reeling a few years ago, and the problem was never fully eradicated even though the focus of policy makers has since turned elsewhere.

Investing is a long-term game. And when evaluating long-term portfolio opportunities, it is worthwhile to consider the relative performance of various segments relative to the broader market.

The U.S. stock market is off to a roaring start in 2024. We are not even half way through the year yet, and the S&P 500 Index is higher by more than +15%. Sounds fantastic, right? It is definitely great news on a headline basis, but unfortunately all is not necessarily well with the broader stock market. A closer look underneath the surface reveals that the market is not nearly as healthy as the headline return might imply.

That was fast.  It was just one week ago that this Chief Market Strategist was putting pen to paper to raise early warning signals about potential signs of economic slowing amid an environment where inflationary pressures were bubbling underneath the surface.

So much feels great about capital markets as summertime temperatures heat up. But the U.S. economy is offering up a soft and cool economic twist with the start of the beach season. As fireworks like NVIDIA continue its march past $3 trillion toward becoming the largest company in the world by market cap and GameStop is suddenly back to posting daily stock price doubles, it’s important to also keep an eye on the daily economic waves rolling in throughout the summer.

The summer season is now officially underway. And despite robust gains already this year, capital markets are primed and ready for a hot stock summer.

It seems like a frivolous stock market novelty. Companies like GameStop and AMC Entertainment with their relatively small market caps and even more meager sales in the context of the overall marketplace suddenly found themselves returning to the financial news spotlight.

It has been a primary downside risk for financial markets for more than a year now. But after repeatedly coming in hotter than expected in many reports so far in 2024, the latest reading on inflation surprised the markets by coming in cooler than expected on Wednesday.