The market rally continued in the first quarter of 2024 with most risk assets posting solid gains. Multiple factors contributed to the positive environment for risk assets, including; economic growth remained surprisingly resilient, inflation continued to cool, and positive real wage growth helped to improve consumer sentiment. Overall, the first quarter was an interesting beginning to what will likely be an eventful year.  Ongoing geopolitical risks and U.S. election uncertainty, combined with stock markets at all-time highs are an important reminder of the importance of diversification in a potentially volatile world.  U.S. large-cap stocks were up 10.6% and small-cap stocks finished the quarter up 5.2%.  Value stocks outperformed in March but lagged for the quarter.  Foreign-developed stocks rallied 5.9% while emerging stocks were up 2.4%. Core U.S. bonds were down for the quarter, at (0.78%) as U.S. Treasury yields rose. Inflation-sensitive bonds were flat for the quarter and high-yield bonds finished up 1.5%.   

In this quarter's commentary, we focused on the following topics:

• An Artificial Intelligence (AI) Update: we update three areas - the rapid adoption of AI technology, the potential impact on the economy, and the phases of the AI investment cycle. 
• Markets are Pricey But Opportunities Abound: although broad market indices are at all-time highs there are still good investment opportunities across the bond and stock universe. We highlight some of the areas that have the best expected returns in the years ahead.

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