The Pension Boards - PBUCC - Market Update from CIO Dave Klassen

Market Update from CIO Dave Klassen – September 2024

Global equity markets continued the positive rally from the previous month led by emerging markets as China showed a strong rebound on the back of stimulus measures by the government. The global equity index (MSCI ACWI IMI) increased by +2.32% in September and is up +18.66% YTD. The S&P 500, which tracks large cap U.S. stocks, increased by +2.14% in September and is up +22.08% YTD. The Russell 2000 Index, which tracks domestic small cap stocks increased by +0.70% in September and is up +11.17% YTD. The International developed equity index (MSCI EAFE) increased by +0.92% in September and is up +12.99% YTD. The emerging markets index (MSCI EM) increased by +6.68% in September and is up +16.86% YTD.
In September, bond yields decreased across maturities; the 30-year U.S. Treasury bond yield decreased by 6 bps to 4.14%, the 10-year yield decreased by 10 bps to 3.81%, and the 2-year yield decreased by 25 bps to 3.66%.
The Barclays U.S. Aggregate Index, which is a measure of U.S. Bond prices, increased by +1.34% in September and is up +4.45% YTD.

U.S. gross domestic product (GDP) in the second quarter of 2024 increased by 3.0%, according to the “Third” estimate released by the Bureau of Economic Analysis. In the first quarter of 2024 GDP increased by 1.6%.
The September Services PMI (formerly Non-Manufacturing Purchasing Managers Index) increased to 54.90% from 51.50% in August. This represents expansion and is higher than market expectations of 51.70%. The September Manufacturing PMI remained unchanged at 47.20%. Per the Institute for Supply Management (ISM), a reading above 50 is considered economic expansion and below 50 is considered economic contraction.
September non-farm employment increased by 254,000 jobs, and the unemployment rate decreased to 4.1%, as reported by the Bureau of Labor Statistics on October 4th, 2024. In September employment increased in food services and drinking places, health care, government, social assistance and construction. Average Hourly Earnings (wages) increased by 4.0% year-over-year in September.

The Equity Fund increased by 1.69% in September and is up 16.12% YTD. The Bond Fund increased by 1.55% in September and is up 4.70% YTD. The Stable Value Fund was up +0.21% for September and is up 1.72% YTD. The Northern Trust Global Sustainability Index Fund (GSIF) increased by 1.80% in September and is up 18.14% YTD.
The Balanced Fund increased by 1.89% in September and is up 10.08% YTD. The Target Annuitization Date TAD 2025; TAD 2030; TAD 2035; TAD 2040 TAD 2045 and TAD 2050 returns were 0.84%, 1.43%, 1.63%, 1.65%, 1.66% and 1.67% respectively for September and up +5.69%, +9.47%, +10.81%, +12.51%, +13.33%, and +14.03% YTD.