Markets “In a Nutshell” for December 4, 2023
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 2.40%, the S&P 500 was up 0.80%, and the NASDAQ rose 0.40%. Foreign stocks (MSCI EAFE) were also up, rising 0.1%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.21%. (Data source: Wall Street Journal)
November to Remember
Markets had a strong November as we wrapped the month up last week. This was the best single-month gain for equities in almost a year and a half and the 7th best monthly return in the past 30 years. This November was also the 2nd best November in the past 30 years as stocks rose 9%. This was welcoming to investors after a pullback from August – October of over 10%. One cause for this strong November was that rates have been on their way down as rates peaked around the end of October, the 10-Year Treasury has fallen from 4.988% to 4.226%. If we continue to see rates move lower, markets could continue to rise through the end of the year. If we see rates rise, the market may struggle to move much higher in the short term.
Can the Market Make a New High?
The S&P 500 is now within 5% of its all-time high it set in January of 2022. The market has roared back the past month but could be facing some headwinds going forward. Some risks that investors will face are a possible shift in Fed policy expectations as currently, the market has no more hikes priced in and cuts beginning in 2024. Another worry is the 2024 election coming up which could cause some volatility within the market. Geopolitical concerns also are still high as conflicts in Europe and the Middle East continue. The positive for the market is that historically once the market makes a new high after a bear market, the year following is very strong. The average return in the following year is over 18% and typically starts a new bull market.
What is the best single month for the market since 1992? (Scroll Down for Answer)
Have a Great Week!
1. April 2020. After the market decline from Covid, stocks roared back to have the best month in the past 30 years.