Welcome to the wild world of Wall Street! It's the final trading day of the year, and stocks are just drifting along, enjoying the unexpected gains they've experienced in 2023. Talk about surprises!
The benchmark S&P 500 index has been on fire, sitting oh-so-close to its all-time high. With a whopping 24.6% gain for the year, it's been an impressive run. And hey, let's not forget about the Dow Jones Industrial Average, which hit yet another record just yesterday. It's up more than 13% this year. But wait, there's more! The Nasdaq has been blazing its own trail, with a stunning 44% gain. This surge has been powered by the bigwigs in technology, like Nvidia, Amazon, and Microsoft. Cue the digital applause!
But it's not just the stocks that are making waves. Treasury yields are stealthily sneaking higher, adding a bit of spice to the mix. And let's not forget about crude oil prices, strutting their stuff and rising to the occasion.
Now, let's dive a little deeper into the fascinating world of stocks. The year 2023 has seen some serious winners. The so-called Magnificent 7, including Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla, have triumphed, claiming two-thirds of the gains in the S&P 500. Particularly, Nvidia deserves a standing ovation with its mind-boggling 240% gain.
But hold on, it's not just Wall Street that's been dancing to the beat of success. European markets have had their fair share of gains too. France and Germany have made some impressive double-digit advances, while Britain has been keeping it classy with a climb just under 4%.
Now, let's hop over to Asia. It seems like their markets have had a bit of a mixed session on this final trading day. Tokyo's Nikkei 225 bid farewell to the year with a 0.2% dip, but fear not, it had an astonishing 27% gain in 2023, its best performance in a decade. Looks like the Japanese central bank was feeling generous with the monetary policy, inching toward the brave decision of ending its ultra-lax approach after inflation finally hit its long-awaited target of about 2%.
In Hong Kong, the Hang Seng index seemed to be in a state of equilibrium, ending flat. Meanwhile, the Shanghai Composite index decided to go out with a bang, gaining 0.7%. Unfortunately, the Shanghai index suffered a 3% loss this year, while the Hang Seng fell nearly 14%. The struggles of the property sector, lackluster global demand for China's exports, along with hefty debt levels and wavering consumer confidence have all played a part in this economic rollercoaster ride.
Back to the good ol' USA, we wrap up the year with a quiet day on Wall Street. But fear not, all the major indexes are on track for weekly gains, with the S&P 500 leading the charge for its ninth consecutive week of wins. Color us impressed!
It's been a year of expectations and surprises. Inflation was expected to ease further as the Federal Reserve pushed interest rates higher, potentially leading to a weaker economy or even a recession. However, things didn't quite go as anticipated. Inflation did come down, hovering around 3%, but the economy held strong, fueled by solid consumer spending and a healthy job market. Talk about a plot twist!
Now, the stock market is the ultimate optimist, confidently betting that the Federal Reserve can achieve a 'soft landing.' This dreamy scenario involves the economy slowing down just enough to keep high inflation at bay, without stepping into the dreaded realm of a recession. This newfound optimism has investors looking toward the future, eagerly expecting rate cuts as early as March. A little bit of economic magic, anyone?
As we wrap up this exhilarating year, the 10-year Treasury yield is at 3.87%, a number that was unimaginable in October when it broke through the 5.00% mark. It's been a wild ride, but the pressure on stocks seems to have eased for now.
And shifting gears to the world of black gold, U.S. benchmark crude oil is strutting its stuff, up 8 cents at $71.85 per barrel. Meanwhile, Brent crude is joining in on the fun, advancing 22 cents to $77.37 per barrel. The oil market seems to be ending the year with a flourish.
So, there you have it, folks! The final trading day of 2023 has been a spectacle to behold. Wall Street has proven once again that it's a place where surprises thrive, and the markets never fail to keep us on our toes. As we bid farewell to this remarkable year, we can only wonder what exciting twists and turns await us in the wild world of finance in 2024. Happy trading!
