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CIO Thoughts: The S&P 500 is Up 34% Since October 27. Now What?

The markets are experiencing a growth scare, which we believe is validated by tight monetary policy and weaker macro data (i.e., loosening of the labor market, weaker GDP, ISM Manufacturing, weaker retail sales, etc). 

Is the bull market over?  No, but clearly, the effects of tight monetary policy after 15+ months of high interest rates and stubborn inflation have finally hit the US economy.

We remain constructive, but we think markets are prone to a 10%-15 correction, and in fairness, this is within equities' normal distribution. We continue to advocate for globally diversified, multi-factor portfolios that can deliver upside while hedging the downside.

Markets have had quite a ride in the past 8 months. What made us very constructive in December 2023 was

  • The Fed pivoted and acknowledged that rate cuts were on the horizon for 2024.

  • The average stock had a valuation that made the risk/reward favorable in our view.

  • Market sentiment was poor. Recall that "T-bill and Chill" was the mantra for most of 2023.

However, there has been a material change in several of the above-mentioned areas, coupled with a growth slowdown. Therefore, our ETF portfolios required some tweaking.

What has changed as of June 2024?

  • Market cap-weighted index valuations have richened considerably.

  • Inflation has been stubborn (the Fed has not been able to cut despite 7-8 cuts priced into markets at the start of 2024).

  • Economic data has softened.

  • Market breadth has been quite weak. See the chart below from MS.

Source: Bloomberg, Morgan Stanley Research

  • Sentiment on the "Mag 7" has gone parabolic, despite Barron's argument that there is only the “Mag 1” stock (see chart below).

Data as of May 31, 2024. Source: S&P Dow Jones Indices.


  • As shown in the chart below, most of the rally year-to-date in the S&P 500 has been driven by Nvidia’s parabolic move in 2024.

Source: Bloomberg. @Mayhem4Markets

  • Front-end rates have been anchored, making equity risk premiums the worst in 20 years. In short, "T-bill and Chill" remains the mantra.

  • Many advisors are comfortable hiding in T-bills and nibbling on AI stocks, semiconductors, and other growth cohorts. This has made it painful for broader market participation.

  • We recently added growth stocks to our portfolio to hedge the risk that economic growth will continue to materially weaken. The analogy is that large-cap bellwether stocks are able to grow their earnings and profits regardless of the macro environment, interest rate, or credit cycle.

  • As I tweeted last week, the labor market is finally showing evidence of loosening.


  • Rather than trying to determine when the Fed’s next cut will be, advisors should focus on the big picture and build a portfolio that can weather the storm.  Astoria prefers to stick with high quality stocks and a globally diversified multi-asset portfolio.  Markets never go up in a straight line, and bull markets last longer than one can imagine.

  • Lastly, if you haven’t seen details of Astoria’s Inaugural Macro Summit hosted at the Nasdaq MarketSite, visit  We have a high-caliber lineup of speakers.


John Davi

As of June 25, 2024, Astoria Portfolio Advisors held positions in NVDA, MSFT, AAPL, AMZN, META, TSLA, GOOGL, and GOOG on behalf of its clients. There are no warranties implied. Past performance is not indicative of future results. Information presented herein is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. The returns in this report are based on data from frequently used indices and ETFs. This information contained herein has been prepared by Astoria Portfolio Advisors LLC on the basis of publicly available information, internally developed data, and other third-party sources believed to be reliable. Astoria Portfolio Advisors LLC has not sought to independently verify information obtained from public and third-party sources and makes no representations or warranties as to the accuracy, completeness, or reliability of such information. Astoria Portfolio Advisors LLC is a registered investment adviser located in New York. Astoria Portfolio Advisors LLC may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements.

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