As 2023 draws to a close, the anticipated year-end rally appears to be losing momentum, despite earlier signals boosted by the Federal Reserve’s suggestions of imminent rate adjustments. However, amidst this backdrop, the year holds significant milestones, especially for the Nasdaq, marking its most outstanding performance since 2003.
Key Market Updates:
- S&P 500: The year witnessed the S&P 500 initiating 0.1% higher, but as midday approached, it faced a decline of nearly 0.5%. Despite this, with a 25% surge, 2023 concludes with the index poised for its ninth consecutive weekly gain, contrasting sharply with its 2022 decline of about 20%.
- Dow Jones Industrial Average: While December saw the Dow achieving multiple peaks, including setting records in the past five sessions, it commenced the day 0.3% lower. Nonetheless, with a 14% rise in 2023, the Dow remains on track for a record-breaking streak.
- Nasdaq Composite: Standing out prominently, the tech-centric Nasdaq surged by an impressive 45%, echoing its resilient recovery from the dot-com downturn in 2003. Although commencing the day with a 0.1% increase, by midday, it observed a 0.8% dip, underscoring its potential for further growth.
Currency and Economic Highlights:
- US Dollar: The US dollar is poised for its most challenging year since 2020, with the US dollar index declining over 2% due to anticipated rate cuts in the upcoming year.
- US Treasuries: Despite nearing a 5% mark previously, the 10-year US Treasury note is anticipated to conclude the year below 4%, aligning with trends observed since November.
2023’s robust stock performance can be attributed to the resilient US economy, even amid Federal Reserve interventions. Ending the year in “Extreme Greed” on CNN Business’ Fear and Greed Index, economic indicators such as reduced inflation at 3.1% and a steady unemployment rate of 3.7% showcase underlying strengths. However, geopolitical tensions, economic concerns in China, and uncertainties surrounding the Fed’s policies cast shadows throughout the year.
Winners and Losers of 2023:
Winners: Dominating the market, tech giants like Apple, Microsoft, and Tesla witnessed surges exceeding 100%. Furthermore, mid-cap entities such as Duolingo and Abercrombie & Fitch showcased impressive growth trajectories. Notably, ImmunoGen’s 499% surge followed AbbVie’s acquisition announcement.
Losers: Enphase Energy faced challenges, witnessing a decline of about 49%. Similarly, Moderna and Pfizer struggled, with shares dropping by 45% and 44%, respectively. Dollar General also grappled with a 45% decrease, necessitating leadership changes to navigate economic constraints effectively.
