Magnus Financial Group LLC

Happy Labor Day, everyone! We'd like to acknowledge and thank all of the American workers for their commitment and hard work.

■ Despite narrow market breadth and a growing U.S. deficit, signs of slowing economic growth and gradually cooling inflation appear to be enough to keep the content and yields relatively contained—at least for now.

■ Capital markets have been in risk-on mode since the Fed’s pivot in December 2023, with a handful of mega-cap tech stocks outperforming the broader .

■ Although elements of this market environment seem unsustainable, there is no reason that the current unusual dynamics cannot continue as long as the underlying conditions—crisis-level fiscal spending, an implicitly higher inflation target, tapering quantitative tightening, a stable labor market, and decent —continue.

■ Limited political will to cut spending means that looser could impede the Fed’s efforts to bring inflation back to 2% while also increasing the debt burden.

■ The may serve as the final arbiter in determining when the slow-motion crisis of rampant fiscal spending reaches a critical point. While a sustained rotation to broader equity markets would be welcomed, predicting the timing of such a rotation is impossible.

For now, the status quo may continue—that is, until it doesn’t.

The full Q3 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q3-2024/

Please see the attached Q3 2024 Market Outlook which may be of interest to you:
https://magnusfinancial.com/market-outlook-q3-2024/

magnusfinancial.com

Magnus Financial Group LLC is delighted to announce that our CEO & President, Michael Schwartz, CFP®, AEP® has been named to the Forbes/SHOOK Research’s 2024 Best-In-State Financial Security Professionals list for the 4th consecutive year.

View the Ranking:
https://www.forbes.com/lists/best-in-state-financial-security-professionals/

View the Methodology:
https://www.forbes.com/sites/rjshook/2024/07/10/methodology-americas-top-financial-security-professionals-2024/

Methodology: America’s Top Financial Security Professionals 2024 We look for individuals who are best prepared to engage in more meaningful conversations about life while protecting against the perils posed by disability, death or job loss.

Magnus Financial Group LLC is happy to announce that we have earned a place on Financial Advisor Magazine's 2024 list of the Top 50 Fastest Growing RIAs, ranking 28th. Additionally, we have been included in Financial Advisor Magazine's 2024 RIA rankings for the seventh consecutive year.

View the Ranking:https://www.famag.com/userfiles/000000000002024_IMAGES_ALL/FA_ISSUES_2024/FA_JULAUG_2024/2024_RIA_Ranking_Online.pdf

■ U.S. markets delivered mixed results in the second quarter. stocks climbed 4.3% while small cap stocks declined by 3.3%. Bonds ended the quarter up 0.1%.

■ Despite market and expectations for at least one interest rate cut this year, U.S. inflation remains above the Federal Reserve’s 2% target.

■ A handful of mega-cap have contributed to most of the S&P 500’s year-to-date gains as market breadth remains narrow and tech sector are at the high end of historical ranges.

■ The fiscal situation remains precarious, as evidenced by a notable lack of fiscal responsibility in the recent presidential debate, which suggests a persistent lack of budgeting restraint.

■ Despite these concerns, slowing and inflation appear enough to keep the bond market content, and yields remain relatively contained—at least for now.

Please see the attached Q2, 2024 Market Commentary which may be of interest to you:
https://magnusfinancial.com/market-commentary-q2-2024/

Market Commentary – Q2, 2024 – MagnusFinancial.com  Back  Back Market Commentary – Q2, 2024 - July 11, 2024 Download Status Quo U.S. markets delivered mixed results in the second quarter. Large cap stocks climbed 4.3% while small cap stocks declined by 3.3%. Bonds ended the quarter up 0.1%. Despite market and Fed expectations for at least one in...

Please see the attached Asset Class Returns Quilt - Q2 2024 which may be of interest to you:
https://magnusfinancial.com/asset-class-return-quilts-q2-2024/



Sources: Bloomberg, Morningstar, SpringTide, Ibbotson Associates, MSCI, Alerian, LBMA

Asset Class Return Quilts – Q2, 2024 – MagnusFinancial.com  Back  Back Asset Class Return Quilts – Q2, 2024 - July 9, 2024 Download Asset Class Return QuiltCalendar Year and Trailing Total Returns U.S. Equity Sector Return QuiltCalendar Year and Trailing Total Returns U.S. Equity Factor Return QuiltCalendar Year and Trailing Total Returns Fixed Income &...

Happy Juneteenth: Here's to celebrating freedom today and every day.

■ May was nearly ideal for most , and U.S. equities performed best as large cap and small cap stocks both rose about 5%. Intermediate-term bonds ended the month up 1.7%—their best monthly return this year.

■ While AI excitement remains centered on mega-cap technology companies like Nvidia, there is growing attention on the infrastructure needed for AI development, particularly the vast data and significant electricity required to train and run learning models.

■ At the sector level, information was the top performer, gaining 10% over May, followed by utilities, which ended the month up 8%.

■ Markets have benefitted from the easing of pressures, but maintaining stability requires keeping both inflation and contained.

Please see the attached May 2024 Market Commentary which may be of interest to you:
https://magnusfinancial.com/market-commentary-may-2024/

Market Commentary – May, 2024 – MagnusFinancial.com  Back  Back Market Commentary – May, 2024 - June 14, 2024 Download Power Play May was nearly ideal for most asset classes, and U.S. equities performed best as large cap and small cap stocks both rose 5%. Intermediate-term bonds ended the month up 1.7%—their best monthly return this year. While...

■ Even though the wants to cut short-term interest rates, longer-term rates may stay higher for longer if inflation remains elevated.

■ Historically, tightening cycles (such as this one) have constrained lending.

■ However, in the current climate, the relatively new and growing credit class seems to be filling the void left by banks.

■ Private credit is a form of non-bank financing that provides and other financing options to companies, typically not accessible through public markets, focusing on direct lending, mezzanine financing, distressed , and special situation investments.

■ It currently holds nearly $2 trillion in assets.

The full Q2 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q2-2024/

■ In April, rising yields and increased geopolitical tensions pressured the stock market, and U.S. large cap declined 4.1% while small cap stocks ended the month down 7.0%.

■ Preliminary estimates show the U.S. grew by 1.6% in the first quarter, the slowest pace in nearly two years. With three consecutive warmer-than-expected CPI prints, remains well above 2%, and market expectations for rate cuts are fading.

■ A policy tension has emerged between the U.S. Department of Treasury, which is pushing for robust , and the Federal Reserve Board, which should be prioritizing their 2% inflation goal.

■ The tug-of-war between these two groups will cause opportunities and risks to ebb and flow, but it remains critical that inflation and stay contained to support the economy and .

Please see the attached April 2024 Market Commentary which may be of interest to you:
https://magnusfinancial.com/market-commentary-april-2024/

Market Commentary – April, 2024 – MagnusFinancial.com  Back  Back Market Commentary – April, 2024 - May 24, 2024 Download Policy Tug of War In April, rising bond yields and increased geopolitical tensions pressured the stock market, and U.S. large cap stocks declined 4.1% while small cap stocks ended the month down 7.0%. Preliminary estimates show ...

■ While still negative, the Conference Board’s Leading Economic Index (LEI) is starting to recover, and the The Conference Board no longer forecasts a recession in 2024.

■ There are further signs of stronger economic .

■ Final Gross Domestic Product (GDP) results confirmed that the U.S. remained strong throughout 2023. Fourth-quarter GDP growth was revised upwards from 3.2% to an annualized 3.4%, driven by personal and government spending.

■ Manufacturing sector activity grew for the first time since October 2022, with an ISM Manufacturing PMI reading of 50.3 in March (a reading above 50 signals expansion in the sector).

■ The March ISM Manufacturing print broke the longest contractionary trend on record for the .

■ The ISM Services PMI indicated ongoing expansion with a March reading of 51.4, marking 15 consecutive months of growth in the services sector.

The full Q2 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q2-2024/

We’ve said we would not wait for inflation to get down to 2% because, if you wait for that, monetary policy works with long and variable lags. So, we’ve said for some years that we would start restoring the Federal funds rate to a more normal, almost neutral level. We’re far from neutral now. And, we do plan, assuming the economy moves along the lines we expect, to start the process of dialing back restrictions.

Jerome Powell, Federal Reserve Board Chairman (Semiannual Monetary Report to the Congress on March 7, 2024)

The full Q2 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q2-2024/

■ Equity markets ended the first on a strong note. While risky assets saw robust returns, interest rate-sensitive areas of the market remained under pressure.

■ U.S. large cap stocks ended the first quarter up 10.6%, making it the third-best first quarter since 2000 (tied with 2013). U.S. small cap ended the quarter up 5.2%.

■ International developed markets lagged U.S. , ending the quarter up 5.8%. Emerging and frontier stocks ended the quarter up 2.4%.

■ U.S. intermediate-term bonds ended the quarter down 0.8% while international developed market ended the quarter down 4.3%.

■ On the back of central bank buying and heightened geopolitical tensions, ended the first quarter up 7.0%.

■ Midstream energy was one of the top-performing over the quarter (+13.9%).

The full Q2 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q2-2024/

■ Even with well above the Federal Reserve’s 2% target, the Fed has maintained that it will likely cut rates three times this year, suggesting acceptance of a higher inflation target.

■ Rampant fiscal spending, which shows no signs of abating, has become a key driver of economic .

■ If policymakers can contain longer-term bond yields while tolerating higher inflation, the could continue to support above-average equity . But it is crucial that longer-term bond yields do not move materially higher (>5%).

■ Although the may want to cut short-term rates, longer-term rates may stay higher for longer if inflation remains elevated, which could impact other areas of the .

■ Policymakers’ aim and accuracy remain critical as we head towards the second half of 2024 and they navigate the possibility of ‘higher-for-longer’. Whatever the target may be, adjusting asset allocation based on different economic scenarios underscores the importance of diversification in management.

The full Q2 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q2-2024/

In spite of the unsettling landscape, including last year’s regional bank turmoil, the U.S. economy continues to be resilient, with consumers still spending, and the markets currently expect a soft landing. It is important to note that the economy is being fueled by large amounts of government deficit spending and past stimulus.

Jamie Dimon, JPMorgan CEO

The full Q2 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q2-2024/

Magnus Financial Group wishes those celebrating Passover a holiday filled with sweetness, meaning, and lasting happiness and freedom in your home.

Please see the attached Topical Research which may be of interest to you:

https://magnusfinancial.com/asset-class-return-quilts-q1-2024/

Asset Class Return Quilts – Q1, 2024 – MagnusFinancial.com  Back  Back Asset Class Return Quilts – Q1, 2024 - April 10, 2024 Download Asset Class Return QuiltCalendar Year and Trailing Total Returns Calendar Decade and Trailing Total Returns U.S. Equity Sector Return QuiltCalendar Year and Trailing Total Returns U.S. Equity Factor Return QuiltCalendar Y...

Having been in this industry for decades, I’ve never seen such strong support for nuclear power… A number of private companies are taking action now with plans to support the expansion of clean nuclear energy today and in the years to come.

-Tim Gitzel, CEO of Cameco Corporation

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/

[Red Sea disruptions] could potentially have quite significant consequences on global growth… At this time when inflation is a big issue, it’s putting inflationary pressure on our costs, on our consumers, and ultimately on consumers in the U.S. and Europe.

- Vincent Clerc, CEO of A.P. Moller - Maersk

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/

Magnus Financial Group wishes a happy and tranquil Easter to those celebrating! May this season bring you love, hope, and renewal.

■ Short-term bills, which comprise over 21% of total , are expected to continue to rise.

■ Nearly $9 trillion in government debt matures within the next year, which will need to be rolled at much higher .

■ With the amplified pressure of doing so in an election year, where fiscal decisions may be scrutinized for their long-term impact on the .

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/

■ At nearly $2.4 trillion, issuance in 2023 was the highest after 2020. 2024 is already gearing up to be another mammoth year.

■ Fiscal governance and a growing burden remain a key concern heading into 2024.

■ The U.S. ended the 2023 fiscal year with a $1.7 trillion deficit—the largest yet in a non-crisis or non-recessionary year.

■ The average rate in the U.S. Treasury was 1.5% in February 2022 and ended December 2023 at 3.1%.

The full Q1 2024 Market Outlook can be found at:
https://lnkd.in/gjEzPK2x

■ Foreign of Treasuries has waned significantly since 2015.

■ Only 30% of outstanding Treasury are held by foreigners, compared to 43% in 2015.

■ China, the second-largest foreign holder of U.S. Treasuries after Japan, has been dramatically reducing its U.S. Treasuries .

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/

We are spending like drunken sailors. Pre-COVID, the federal government was 20% of GDP in spending. Now it’s 25% of GDP… My father told me ‘if you’re in a hole, stop digging Stan’.

-Stanley Freeman Druckenmiller, American Investor

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/

■ Historically, longer-term Treasury yields tend to follow . This suggests that yields should go much higher.

■ The outlook for bonds seems heavily policy-driven.

■ Stocks and long-term , both long-duration , have been more correlated over the last three years than at any point since at least the late 1990s.

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/

■ While less than history relative to U.S. large caps, U.S. small cap stocks continue to trade at a premium .

■ Active management in small cap is key, as profitable companies have substantially outperformed the broader small cap universe over the past four years.

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/

■ Emerging market look cheap compared to U.S. large cap stocks.

■ Over the very long term, emerging stocks have seen prolonged periods of over- and under-performance relative to U.S. stocks.

■ The current 10-year performance is amongst the widest in history.

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/



Source: Bloomberg

■ Using a yield-to-earnings comparison (equity risk premium, or ERP), U.S. stocks are less attractively priced vis-à-vis than at any point since the 1990s.

■ History suggests be patient and wait for a more attractive entry point

■ Analysts are currently expecting to grow by 11.8% in 2024.

■ Only time will tell whether this will be sufficient to grow into high , but guidance will be key.

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/

■ Cyclical sectors have been gaining momentum in recent months, and particularly since December 12.

■ Relative to the S&P 500, these cyclicals still signal that market breadth remains unhealthy, with several stocks responsible for the majority of returns over the past year.

The full Q1 2024 Market Outlook can be found at:
https://magnusfinancial.com/market-outlook-q1-2024/