General Market Commentary as of December 31, 2023
The final quarter of the year concluded 2023 with all US major indices posting positive returns. The S&P 500 ended the quarter up 11.24%, the Dow Jones Industrial Average gained 12.48%, and the Nasdaq Composite increased 13.56%. Value underperformed growth within large caps and outperformed within small caps. Small caps outperformed large caps. REIT indices outperformed equity market indices. Developed markets outside of the US posted positive returns for the quarter and underperformed the US market.
Interest rates generally decreased in the US Treasury market for the quarter. In terms of total returns, short-term US treasury bonds returned +3.21% while intermediate-term US treasury bonds returned +3.99%. Short-term corporate bonds returned +4.12% and intermediate term corporate bonds returned +5.86%. Returns for short-and intermediate-term municipal bonds were +3.53% and +6.53%, respectively. Within the municipal fixed income market, general obligation bonds returned +7.79% while revenue bonds returned +8.15%
The Federal Funds Rate remained at a 5.25% to 5.50% range throughout the 4th quarter and the expectation set by Fed Chair Jerome Powell is for rate cuts to begin in March of 2024. The labor market has remained a bright spot in a cooling economy. Mortgage rates have come down since October and the expected cut in interest rates should revive demand in the housing market.
The Dow Jones Industrial Average set a record high on December 28, 2023 at a closing value of 37,710.10. The Nasdaq Composite and the S&P 500 also finished the year strong approaching record highs set in late 2021 and early 2022, respectively. Considering the general sentiment leading into 2023, the markets showed resilience and rewarded those who stayed diligent in a long-term investment plan.
Market Recap
| Tot Return | 3-MO* | 12-MO* | 3-Year* | 5-Year* | Closing Value |
|---|---|---|---|---|---|
| S&P 500 | 11.24% | 24.23% | 8.29% | 13.73% | 4,769.83 |
| Dow Jones Industrial Average | 12.48% | 13.70% | 7.19% | 10.07% | 37,689.54 |
| NASDAQ Composite | 13.56% | 43.42% | 5.21% | 17.74% | 15,011.35 |
Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.
All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.
