2023 In Review

Except for China, most global equity markets closed 2023 in the green (MSCI World +24.4% for 2023). Despite the wars in Gaza and Ukraine, stocks rallied into year-end, with bonds reversing the heavy losses from earlier in the year as US inflation fell and recession fears eased, replaced by a growing belief that US policymakers would achieve a soft landing for the economy.

US markets recorded impressive gains for 2023. The Dow rose by +13.7%, while the tech-heavy Nasdaq Composite rose by 43.4% and the S&P 500 rose by +24.2%. The Nasdaq’s 43.4% YoY jump was led by the Magnificent Seven stocks– Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.

Despite the slow pace of the European economy, major European markets recorded solid gains for 2023, bouncing back from 2022. Germany’s DAX gained +20.3%, while France’s CAC Index closed +16.5% higher. The UK’s FTSE-100 is up 3.8% for 2023.

China’s equity markets were the outliers in 2023, underperforming US equity markets by a considerable margin in a year that can best be described as highly disappointing for China bulls. Investor concerns around the country’s economic recovery continued to weigh on sentiment, while a government crackdown on excess borrowing by property developers has resulted in a housing market slump. Hong Kong’s Hang Seng Index was down -13.8%, while the Shanghai Composite Index was down -3.7%.

Japan’s benchmark Nikkei ended the year up 28.2%. Among commodities, Brent crude ended 2023 down 10.3%, the spot gold price ended the year at +13.1%, platinum was down -7.7% and palladium down -38.6%.

South Africa’s JSE All Share Index advanced by +5.3% in 2023. Property counters were up +2.5%, Fini-15 was up +15.1%, while the Indi-25 rose +14.8%. The Resi-10 was the laggard, it was  down –18.7%, despite good performances from the gold counters. The rand was down -7.8% against the dollar in 2023.

For 2024 we see lots of volatility caused by all the elections taking place across the world but with interest rates declining, we should see equities and bonds performing well.

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