Q4 2023 Market Review
In Q4 economic indicators signaled that inflation was slowing quickly and the Fed would not only stop increasing interest rates but would likely be cutting the rates in 2024.
In Q4 economic indicators signaled that inflation was slowing quickly and the Fed would not only stop increasing interest rates but would likely be cutting the rates in 2024. The market reacted positively to this news as both stocks and bonds rallied. US Stocks, Developed Stocks and Real Estate were all up double digits (12%, 11% and 15% respectively). Small Cap stocks outperformed Large Caps both domestically and internationally. Value stocks underperformed Growth stocks except in domestic Small Cap and Emerging Markets.
Additionally, interest rates dropped on this news as bonds rallied both domestically and globally (7% and 5% respectively).
Two major economic themes emerged for 2024. Either the US economy would go into recession forcing the Fed to cut rates even quicker or the economy would remain strong (Soft Landing) and the Fed will have delicately managed to implemented the greatest interest rate hike in history without injuring the economy.
Separately, as the US debt approaches 121% of our gross domestic product, included in the Market Review, is an article explaining that country debt doesn’t impact stock performance.
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