Market Overview: Strong Performance Across Major Indices in 2024 

As is well known, at SIA, time is largely spent in a relative world, where powerful AI is constantly scanning for differentials. Once scanned by SIA practitioners, these insights allow them to glean valuable market intelligence. With the new year approaching, the next few weeks will be dedicated to summing up market activity for 2024 from various perspectives, including an absolute return view, to both evaluate past performance and set the stage for 2025 for advisors. By all equity accounts, 2024 has been a standout year, with the broad S&P 500 Index up 27.56% YTD, the larger cap-weighted S&P 100 Index up 32.90% YTD, and the NASDAQ Composite slightly ahead at 33.47%. Smaller cap stocks, measured by the Russell 2000 Index, are up 16.99%, with broader participation picking up later in the year, catching up to the mega-cap stocks. For ultra-large cap stocks, the Roundhill Magnificent 7 ETF (MAGS) has surged 70.82%, driving much of the US market rally, though this trend appears to be broadening, as discussed in previous editions of SIA Equity Leaders Weekly. In Canada, the S&P TSX Composite Index has gained 22.42%, while the S&P/TSX 60 Index, representing the largest companies, is up 21.72%. Mid and small cap stocks in Canada have fared slightly better, with the S&P/TSX Mid Cap Index at 25.45% and the S&P/TSX Small Cap Index at 20.67%. Fixed income has lagged, with the CBOE Bonds 5, 10, and 30 Year indices showing YTD returns of 7.66%, 10.48%, and 11.45%, respectively, with most gains coming in the last quarter as the Federal Reserve eased its tightening cycle in favor of lower interest rates.

Sector-wise, the SIA Market Sector table, attached, ranks returns by the YTD column. The top performer is the SIA Telecommunications Services Equal Weight Index, up 41.80%. Computer Software and Financial Services follow, with returns of 40.51% and 37.73%, respectively. Beyond these, a wide range of sectors have posted substantial double-digit returns, which can be reviewed in detail. Noteworthy trends include a significant portion of the gains coming in the last quarter, indicated by an equal (=) sign. Sectors such as SIA Financial Services saw 27.83% of its YTD return of 37.73% in the last 3 months, while SIA Internet sector surged to 26.75% in the final quarter. SIA Computer Hardware also posted 23.85%, and SIA Leisure gained 22.39% of its YTD return of 23.23%.In addition, some sectors have shown quarterly returns surpassing their YTD numbers, highlighted by a green (>) sign. Notable examples include SIA Specialty Retail, which delivered 18.56% in the last quarter, surpassing the YTD return of 15.01%, and SIA Consumer Durables with a quarterly return of 14.57%, nearly doubling its YTD figure of 8.60%. A standout since the US election has been the SIA Automotive Equal Weight Index, which posted a quarterly return of 9.64% after a YTD decline of -10.55%, highlighted with a green box at the bottom of the table.On the cautionary side, the SIA Aerospace and Defence Equal Weight Index has seen resistance since the US election. Despite a strong YTD return of 18.58%, its performance has waned, with many constituents under pressure, necessitating potential reevaluation. The performance of Leidos (LDOS) will be reviewed in today's stock report, with GE Aerospace covered in the coming days.

Globally, the SIA ETF Country Heatmap for 2024 shows clear winners. South American countries Argentina and Peru posted massive YTD returns of 70.46% and 31.76%, respectively, driven by political stability and their commodities exposure. The United States follows in third place, with a YTD return of 28.81% as represented by the FLQL ETF. Africa (AFK) returned 21.59%, and China came in just behind with 21.40%, bolstered by fiscal and monetary support from the Chinese government. India (FLIN), despite being a booming economy, saw a more modest return of 15.83%, as international capital flowed to other regions. Japan experienced a turbulent year but still managed a 11.29% return, as measured by the FLJP ETF. At the bottom of the list, Mexico (FLMX) saw a decline of -22.80%, followed by Brazil (FLBR) and South Korea (FLKR) with returns of -19.14% and -13.46%, respectively.