New Year, Same Worries

The S&P 500 rose marginally for the 9th week in a row. This is the longest winning streak since 2004. The S&P 500 was up +0.3% last week. Utility stocks were the best performing sector +1.2% while Energy was the worst-performing (-1.4%). The cash S&P 500 index ended Friday’s session and 2023 just short of 4,770.

 

The S&P 500 index returned +26% including dividends (24% w/o dividends) in 2023, albeit off a depressed year-end 2022 close. This return is more than 2x the average annual return of +12% since 1986. The Technology and Communication Services sectors led the market advancing +58% and +56%, respectively. “Boring stocks”, consumer staples, energy, and utilities each declined on the year.

 

Stocks outperformed the 10-year US Treasury note by 23 percentage points. In 2023, with inflation declining, and the Fed pausing rate moves, Bitcoin generated a return 3x greater than the Info Tech sector (153% vs. 58%), according to Goldman Sachs.

 

On the commodity front, oil moved lower during 2023, ending at $71.65/bbl. So much for the alarmist warnings about $200/bbl oil on the back of the Ukraine and Russian war. The primary drivers of oil in 2023 involved disappointing demand outside the U.S. (China), as well as surging oil production in the U.S.

Domestic oil supply ended 2023 at an all-time high of 13.3mm barrels per day. In metals, much to the dismay of inflation alarmists, gold ended 2023 near an all-time high, as real-time inflation measures plunged along with real interest rates in Q4.

 

Volatility, which “collapsed” lower since early November, started to slowly resurface at year end 2023 and today, the first trading day of the year.

 

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Oak Harvest Weekly Stock Talk: The Trouble with Harry (Dent), Robert Kiyosaki, and Fear Sells Well https://www.youtube.com/watch?v=PPUrkEUQKGE

 

Weekly Market Update Ending 12/29/23