Texas Capital Bank Client Support will be closed for Presidents Day on Monday, February 19, 2024. We will be back to our normal 8:00 AM to 6:00 PM support hours on Tuesday, February 20, 2024.

An enhancement has been scheduled for Account Opening on Saturday, April 20th, starting at 8:00 AM to approximately 2:00 PM CT. During this time, Account Opening may not be available or may have reduced functionality.

Bull first quarter, Bull full year — Week of April 1, 2024


Rotation among sectors healthy; manufacturing bottoming

indexwtdytd1-year3-year5-yearindex level
S&P 500 Index0.4010.5532.5211.5015.175,254.35
Dow Jones Industrial Average0.846.1424.258.4511.4839,807.37
Russell 2000 Small Cap2.605.1721.820.828.132,124.55
NASDAQ Composite-0.299.3238.518.7317.4016,379.46
MSCI Europe, Australasia & Far East0.055.8317.895.288.032,346.84
MSCI Emerging Markets0.172.139.38-4.652.761,040.39
Barclays U.S. Aggregate Bond Index0.23-0.782.36-2.440.342,145.23
Merrill Lynch Intermediate Municipal-0.18-0.342.69-0.221.58313.82

As of market close March 28, 2024. Returns in percent.

Investment Insights

 — Steve Orr 

Quarter don’t end.

Last week ended on a high note thanks to Wednesday’s clean-up rally. End-of-quarter positioning by fund managers, along with rebalancing by pension funds, helped several U.S. indices to new highs. The S&P 500 just finished a five-month win streak and the NASDAQ a second five-month streak in the past year. For the quarter, the S&P 500 set 22 new highs; not a record, but impressive. Surprisingly, the big index’s +10% gain is only the 11th best since 1950. In that span, there have been 16 cases in which gains exceeded 8%. In 15 of those, the S&P 500 went to further gains in the year. The outlier is the 1987 crash, for which much of the blame can be laid on Congress for their merger and tax rule changes. This year we hope Congress focuses on getting spending right and nothing else.

Another point about those 15 cases is that the next couple of quarters’ returns were no great shakes. We have argued for a pause or mild correction to calm down some of the frothy sentiment. Just because fundamentals or textbooks say a correction is needed, does not mean Mr. Market will heed the call. There is plenty of ammunition for cyclical Bears to worry over. Valuations remain above average at 21+ times forward earnings. Sentiment remains elevated and net longs are near maximum. The trend is your friend, goes the old saw, and it rings true. The secular Bull remains in place, despite the trend being a bit stretched.

We see a near-term correction as healthy and an opportunity to put funds to work. We would like to time jump over the next two quarters, as these first quarter rally years also see gains in the fourth quarter. A time warp would also jump over most of election season. Since a time warp is not in the cards, we note that April stock returns average above 1% since 1950. Our Stock Trader’s Almanac says that gains typically occur after Tax Day, with traders gearing up for earnings season. 

Dueling speeches

Line’ em up: Seven Fed members speak this week, including Chairman Powell. His press conference after the FOMC meeting and speech last Friday show a remarkable switch in focus. Members Cook and Bostic are calling for caution and possibly no rate cuts this year. Recall two years ago when the Fed began raising rates, the talk was all about knocking out inflation. These last two speeches focused on job growth. Yes, the Fed does have a dual mandate: price stability and full employment. No one is quite sure how to define either one, but Congress added full employment to the Federal Reserve Act in 1977. The inflation battle of reaching 2% per year is not yet won. We will be watching for clues from the speeches this week.

This inflation cycle is running very close to historical norms. The Consumer Price Index rose for 26 months and has fallen for the last 20. Falling inflation just means that prices are rising, just not as fast as a year ago. Economists are rightly scared of deflation or falling prices. Consumers tend to put off purchases for lower prices in the future, stunting economic growth. We are on record as favoring lower prices for our pocketbooks.

History does rhyme, thanks to Mark Twain, and inflation appears to be hitting a trough before rebounding higher in the next couple of years. Call us suspicious, but we wonder why Powell is suddenly changing the narrative from inflation to jobs. Powell’s words create the possibility of a June rate cut if the next couple of months’ jobs numbers fall below expectations. 


Consumer spending is barely positive on unit and after inflation basis. Manufacturing new orders turned higher last month, but the series is heavily influenced by higher prices. Overall, the economy remains stuck in second gear: not too hot, not too cold.

Commodities, stocks and gold all are benefiting from easy financial conditions. Our dashboard remains green, keeping us fully invested in stocks and underweight bonds. 

Steve Orr is the Managing Director and Chief Investment Officer for Texas Capital Bank Private Wealth Advisors. Steve has earned the right to use the Chartered Financial Analyst and Chartered Market Technician designations. He holds a Bachelor of Arts in Economics from The University of Texas at Austin, a Master of Business Administration in Finance from Texas State University, and a Juris Doctor in Securities from St. Mary’s University School of Law. Follow him on Twitter here

The contents of this article are subject to the terms and conditions available here.

Private Banking is provided by Texas Capital Bank (the “Bank”). Advisory services are offered through Texas Capital Bank Wealth Management Services, Inc. d/b/a Texas Capital Bank Private Wealth Advisors (“PWA”), a wholly owned subsidiary of the Bank and an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). SEC registration does not constitute an endorsement of the advisory firm by the SEC nor does it indicate that the advisory firm has attained a particular level of skill or ability. Brokerage services are offered through Kingswood Capital Partners, LLC (“Kingswood”), Member FINRA/SIPC. Texas Capital Bank Private Wealth Advisors and Texas Capital Bank are not registered broker/dealers and are independent of Kingswood. Investments and insurance products are not insured by Bank insurance, the FDIC or any other government agency; are not deposits or obligations of the Bank; are not guaranteed by the Bank; and are subject to risks, including the possible loss of principal. Nothing herein is intended to constitute an offer to sell or buy, or a solicitation of an offer to sell or buy securities. 

Investing is subject to a high degree of investment risk, including the possible loss of the entire amount of an investment. You should carefully read and review all information provided by PWA, including PWA’s Form ADV, Part 2A brochure and all supplements thereto, before making an investment. 

Neither PWA, the Bank nor any of their respective employees provides tax or legal advice. Nothing contained on this website (including any attachments) is intended as tax or legal advice for any recipient, nor should it be relied on as such. Taxpayers should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor or legal counsel. The wealth strategy team at PWA can work with your attorney to facilitate the desired structure of your estate plan. The information contained on this website is not a complete summary or statement of all available data necessary for making an investment decision, and does not constitute a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of the authors and not necessarily those of PWA or the Bank.

©2024 Texas Capital Bank Wealth Management Services, Inc., a wholly owned subsidiary of Texas Capital Bank. All rights reserved. 

Texas Capital Bank Private Wealth Advisors and the Texas Capital Bank Private Wealth Advisors logo are trademarks of Texas Capital Bancshares, Inc., and Texas Capital Bank.

www.texascapitalbank.com     Member FDIC       NASDAQ®: TCBI