Economic Data Watch and Market Outlook
Global equity markets were up modestly for the week as the MSCI World increased by 57 basis points. While the S&P 500 was up just 34 basis points for the week, it soared for the year, increasing 26.29%. Despite the high expectations for the re-opening of China, its economy struggled and the Hang Seng Index declined by 13.99%. The Bloomberg Aggregate Bond Index rose 48 basis points for the week and 5.53% for 2023.
The Magnificent Seven were key drivers of the S&P 500’s and US equity markets returns which is evidenced by the disparity between growth and value. The Russell 1000 Growth rose 42.68% while the Russell 1000 Value advanced a respectable but relatively modest 11.46%.
Small caps surged 12.22% in December after the Fed suggested multiple rate cuts in 2024 and finished up 16.93%. The growth/value gap was far more modest for small caps versus large caps. The Russell 2000 Growth’s 18.66% return outpaced the Russell 2000 Value’s 14.65%.
The S&P had 63 days of moves of 1% or more and as of Friday’s close had finished up for nine consecutive weeks.
According to AAA, gas prices had their first weekly increase since September, rising six cents to $3.12 per gallon from the low of $3.06.
Continuing Jobless Claims were released on Thursday with results slightly worse than expected, coming in at 218,000 versus the estimate of 210,000. Despite markets being closed in most western countries on Monday and some on Tuesday, later in the week the US will release more employment data. Manufacturing data will also be released.
Happy New Year from the Clearbrook Team!
Authors:
Jon Chesshire, Managing Director, Head of Research
Sam Morris, Analyst
Data Source: Factset, HFR (returns have a two-day lag), Jim Bianco Research, , Morningstar, Morgan Stanley, Standard & Poor’s and the Wall Street Journal.