How'd Markets Do In 2023?

The Market is not the Economy.  I know it, but it feels like it to many people ... especially in an election year.

I still think about the often-quoted quip “It’s the economy, stupid” - coined by James Carville, a strategist in Bill Clinton’s successful 1992 U.S. presidential election against incumbent George H. W. Bush.

2022 was the worst year for the U.S. stock market since the 2008 financial crisis.

2023 was much better, but much of the gains came in concentrated sectors.  

To help you get a sense of 2023 returns, VisualCapitalist put together a few helpful infographics.

First, the S&P had a stellar year, with the S&P 500 up 20.4% and the tech-heavy Nasdaq up almost 40%. 

 

via Visualcapitalist

Overall, markets improved, which is unsurprising after the year we had in 2022.  With Energy seeing such a massive boom last year, it recessed a little, but real estate and technology both saw strong gains. 

Here is a more global look at return by asset class.

via Visualcapitalist

Japan saw significant growth, partly driven by China’s Real Estate issues. 

Oil, commodities, and Chinese equities all lost, but that loss in oil and commodities could be driven by China’s woes. 

In 2022, I said it was unlikely that the trends would continue into 2023, which wasn’t much of a prediction ...

On one level, I try not to think about or predict markets, because I know better.  On the other hand, it is an election year, and my opinion matters as a proxy for what people like me think or feel in an election year.  So, with that in mind, I predict that we see a brief market correction blamed on various geopolitical instabilities and partisan weaknesses, followed by a long and steady push higher as we approach the November elections.

What do you expect for 2024?

Do you think the continued investment into generative AI will impact these trends?