Amid the prospect of more flexible monetary policy in 2024, the US stock market closed the last session of the year slightly in the red, which does not dampen the remarkable upward momentum of the last months of the year, driving up the three major indices with monthly, quarterly and annual gains. In 2023, all three posted double-digit growth.
Analysts see reasons for optimism heading into 2024. The US economy's soft landing, with tamed inflation, non-declining consumption and a very resilient labor market, has given momentum to business activity, particularly the S&P, which has posted further gains this year by more than 20%.
At market close this Friday, S&P 500 bulls posted their longest weekly gain since January 2004. Although the U.S. stock market's broadest index closed today down 0.28%, it was just under 30 points away from a record close, it has in up 24% this year, with a record finish. This year was significantly more market-friendly than the last: the reference index fell by around 20% in 2022.
Like the S&P 500, the Dow Jones and Nasdaq posted nine straight weekly gains, their longest streak since early 2019. The Dow Jones Industrial hit several all-time highs in December, including records in each of the last five trading sessions. This Friday it fell 0.05% to close at 37,689. In 2023, the company is targeting a profit of 14%.
But the technology Nasdaq, despite the turmoil in the industry (massive layoffs in Big Tech, the disruption of Although it fell 0.56% this Friday and closed at around 4769, it is up 43% in 2023, the best performance since 2020. It remains about 1,000 points below the all-time high it reached in November 2021, showing the terrible year technology companies have had in 2022 and how much room they still have to recover.
Nvidia, the value that convinces
Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla, the so-called Magnificent 7 group, dominated the S&P 500, rising more than 100% in 2023. Nvidia was up 246%, Meta was up 184% and Tesla was up 130% despite some technical issues. Each of these values had collapsed by more than 50% in 2022.
Nvidia headquarters in Santa Clara (California). Marlena Sloss (BLOOMBERG)
On the negative side, and to the delight of the euro or the yen and other currencies, the US dollar is on track for its worst year since 2020. The US dollar index, a measure of the world's reserve currency's performance against six other currencies, is in Falling more than 2% for the year. The dollar was weakened by the prospect of interest rate cuts next year.
As for US Treasuries, after reaching almost 5%, the 10-year bond yield was below 4% at the end of 2023. Longer-term U.S. Treasury yields fell starting in November, closing near the levels they reached this summer.
Despite the optimism with which analysts and investors are looking forward to 2024, dark clouds on the horizon cannot be ruled out. Geopolitical tensions (the war in Ukraine and the threat of disruption to Red Sea maritime traffic due to the Gaza Strip) and tensions with China (and the direction of its economy, especially the real estate market) are keeping Wall Street vigilant, even as the resilience of the American one 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 to be good, the unemployment rate does not exceed 3.7% and the banking crisis in the spring with the bankruptcy of several regional banks is now only a memory. No one dares claim victory, but stock market results show that the specter of recession that has hung over the U.S. economy for months appears to have been averted.
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