Message from Chief Investment Officer Rod June

With the first half of the year behind us, the U.S. economy continues to fire on all cylinders as stock markets reached all-time highs: the S&P 500 up 14.5%, Nasdaq up 18.1%, and the Dow Jones Industrial Average up 3.8%.  The rally has been fueled, in part, by investments in the Information Technology sector, which has surged 27.8% the first six months of the year as interest in artificial intelligence and the capacity it promises for greater efficiencies and streamlining capabilities remains at the forefront of investors’ minds.  

While the unemployment rate has eked only 4.1% through mid-year, recent job data shows the job market remains healthy with 206,000 jobs added in June, an increase of 8.4% above the consensus.  The Federal Reserve looks to the job market as a key gauge for the overall health of the consumer to absorb higher prices and whether inflation is causing a pullback in spending.  Despite sticky inflation, elevated home prices, and record-high retirement savings, consumer spending continues to keep the economy on solid footing. This has kept the Fed on the sidelines from further interest rate hikes as the Core Personal Consumption Expenditures Index (PCE), a measure of prices for goods and services, retreated from 2.8% in early 2024 to 2.6% as of June 30, 2024, supporting its objective of creating a soft landing.

As attention shifts to the upcoming presidential election in the fall, inflationary concerns, geopolitical tensions, and elevated interest rates are topics that remain top of mind for investors.   However, LACERS remains a long-term strategic investor with a highly diversified portfolio designed to weather changing market conditions.  Our investment approach will continue to support highly selective strategies that provide attractive risk-adjusted returns, regardless of the geopolitical landscape.