Faced with the prospect of a more flexible monetary policy in 2024, the US stock market closed the last session of the year slightly lower, which does not dampen the notable upward momentum registered in the last months of the year, driving the three main indices to monthly, quarterly and annual profits. During 2023, all three have recorded double-digit growth.
Analysts see reasons for optimism for 2024. The soft landing of the US economy, with inflation tamed, consumption that does not decline and a very resilient labor market, has given vigor to operations, notably in the S&P, which It has seen gains of more than 20% this year.
At the close of the markets, this Friday, the bulls of the S&P 500 posted their longest weekly gain since January 2004. While the broadest US stock market index closed down 0.28% today, leaving it just under 30 points shy of a record close, it has gained 24% this year, with a record final auction. This year has been much kinder to the market than the last: the benchmark index fell by around 20% in 2022.
Like the S&P 500, the Dow Jones and Nasdaq have also posted nine consecutive weekly gains, the longest streak since early 2019. The Dow Jones industrial hit multiple all-time highs in December, including records in each of the last five trading sessions. negotiation. This Friday it fell 0.05% and closed at 37,689. In 2023, it has targeted profits of 14%.
But the technology Nasdaq has been the brightest star of the year, despite the turbulence of the sector (massive layoffs in Big Tech, the disruption of X, formerly Twitter, and its competitors, or the race to lead artificial intelligence). Although it fell 0.56% this Friday, closing at around 4769, it is up 43% in 2023, its best performance since 2020. It remains approximately 1,000 points below the all-time high it reached in November 2021, demonstrating the horrendous year that technology companies had in 2022 and how much room they still have to recover.
Nvidia, the value that sweeps
Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla, the group of the so-called Magnificent 7, dominated the S&P 500 and soared more than 100% in 2023. Nvidia gained 246%, Meta gained 184% and Tesla, despite some technical problems, soared 130%. Each of those values had plummeted more than 50% in 2022.
On the negative side, and to the joy of the euro or the yen, among other currencies, the US dollar is on track for its worst year since 2020. The US dollar index, a measure of the performance of the world's reserve currency against six other currencies, has fallen more than 2% throughout the year. The greenback has been weakened by the prospect of rate cuts next year.
Regarding US Treasury bonds, after reaching almost 5%, the 10-year bond yield has ended 2023 below 4%. Longer-dated U.S. Treasury yields declined beginning in November and closed near the levels they were at this summer.
Despite the optimism with which analysts and investors face 2024, dark clouds on the horizon cannot be ruled out. Geopolitical tensions (the war in Ukraine and the risk of disruption of maritime traffic in the Red Sea due to Gaza) and tensions with China (and the direction of its economy, especially the real estate market) keep Wall Street vigilant, although the resilience of the American economy helps. A year ago, inflation was around 6.5%. Today, that rate has more than halved and stands at 3.1%. Consumer spending continues at a good pace, while unemployment does not exceed 3.7%, and the banking crisis of the spring, with the bankruptcy of several regional banks, is only a memory. Nobody dares to claim victory, but the stock market results show that the specter of recession, which hovered over the US economy for months, seems to have been averted.
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