MRM Commentary


Monthly Investment Commentary

May 2024

      Global Markets

              • Indexes in the U.S. and Europe reached new highs as policymakers signaled that rate cuts were coming, if not immediately.
              • Inflation ticked higher in the U.S. but continued to cool in Europe, where the regional economy also showed signs of stabilizing.
              • The Chinese economy also appeared to be gaining traction, although concerns remained about its troubled property sector.

        MRM Group claims compliance with the Global Investment Performance Standards (GIPS®).
        Please contact MRM Group to obtain a Compliant Presentation and/or MRM's list of Composite descriptions.

        MRM Portfolio

        U.S. Equities
        Stocks scored a second consecutive month of solid gains, helping the S&P 500 Index continue the upward trajectory it has maintained with few interruptions since late October. The market’s advance was also notably broad, with an equal-weighted version of the S&P 500 Index gaining 4.25% over the month versus 3.10% for its more familiar, market cap-weighted counterpart. The breadth was also reflected in the outperformance of mid- and small-caps and value shares. The pivot away from the market leadership of the Magnificent Seven mega-cap technology-oriented stocks was a theme of headlines in March.

        Fed signals rate cuts in 2024
        Growing confidence that the Federal Reserve would cut interest rates later in the year despite mixed growth and inflation signals seemed to fuel much of March’s gains. Early in the month, stocks rose after Fed Chair Powell testified before Congress that policymakers were “not far” from having the confidence that inflation’s downtrend will be sustained, enabling them to begin cutting rates.

        Labor Markets
        Some signs of cooling in the labor market and elsewhere in the economy may have also reassured investors about inflation and interest rates. Early in the month, the DOL reported that the so-called quits rate—the share of workers leaving jobs voluntarily, typically considered a good measure of workers’ perception of the ease of finding a new job—fell to its lowest level since August 2020, early in the rebound from the pandemic’s onset. Several days later, the department revealed that the unemployment rate rose to 3.9% in February, its highest level in over two years.

        MRM'S VIEW

        The month’s biggest surprise might have been a slowdown in retail sales in February, including a 0.1% drop in online sales, marking a sharp deceleration from the 6.4% increase over the past 12 months. Meanwhile, various gauges indicated that the industrial side of the economy remained in contraction mode, although data on durable goods orders released late in the month suggested a rebound in capital investment. We remain bullish.

        Source: T.RowePrice

        MRM model holdings as of March 31, 2024



        MRM Group, Inc. (“MRM”) is a state-registered investment advisor and an independent management firm that is not affiliated with any parent organization. Using quantitative selection methods, each MRM strategy searches within a well-defined universe of securities, using consistent investment criteria to identify attractive investments and create diversified portfolios. MRM seeks to provide long-term capital growth.


        The portfolios do NOT use inverse or leveraged ETFs. Universe vehicles may change, from time to time, when approved by the principal of MRM Asset Allocation Group at its sole discretion.


        Effective Nov. 1, 2016 the Dynamic Overlay benchmark was changed to Morningstar’s Tactical Allocation. The benchmark was applied retroactively to the beginning of the performance period, January 1, 2008. This change had the net effect of placing the Dynamic Overlay Model Portfolio in a more favorable light than would otherwise have been the case if we used the blended benchmark described below. Although this change had a favorable impact on the comparative effect on the model’s performance but we believe the change in benchmark more appropriately aligns with our Dynamic Overlay Strategy in that it is designed a tactical allocation rather than a static blended benchmark of 75% S&P 500 Index Total Return and 25% MSCI EAFE. Morningstar’s Tactical Allocation Category averages returns for the peer group based on the return of each fund within the group, for the period shown. The S&P 500 Index with dividends is an unmanaged composite of 500 large-capitalization companies whose data is obtained from the Standard & Poor’s website. S&P 500 is a registered trademark of McGraw-Hill, Inc. The MSCI EAFE Gross Index is a free float–adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada, with data from the MSCI website using price with reinvestment of dividends. The performance of blended benchmarks is shown for comparison because MRM uses securities which track indices related to these products. The Dow Jones US Select Dividend Index comprises 100 stocks and aims to represent the U.S.’s leading stocks by dividend yield. An investment cannot be made directly into an index.


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