Over the past year, we’ve seen a significant drop in mortgage rates, which historically has acted as a positive catalyst for stocks. When the average 30-year fixed mortgage rate declines by more than 100 basis points in a 12-month period, the S&P 500 on average returned over 12%.
This relationship highlights how easing borrowing costs can fuel broader economic optimism and benefit equity markets.
With rates currently down by 144 basis points over the past year, we could see a supportive environment for stocks going forward. As always, we remain focused on monitoring these trends and positioning portfolios accordingly.
Mortgages Drop, Stocks Pop
- We believe the preservation of capital is key to consistent, long-term investment success.
- Our investment approach is grounded in economic theory and backed by quantitative analysis.
- Managing drawdown risk is a pillar from which we build our portfolios.
60-Second Breakdown: September 30, 2024
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
