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Market Pulse

December 2023: Positive Momentum For Year End

Markets snapped a three-month losing streak and bounced back nicely in the month of November. The blue-chip Dow had its best month since October 2022, climbing 8.8% to its highest close since January 2022. The
S&P and Nasdaq rallied 8.9% and 10.7%, respectively, to notch their best monthly performances since July 2022.

November’s stellar rally was powered by a series of key drivers. First, inflation continues to slow down. The Personal Consumption Expenditures (PCE) Price Index rose less than 0.1% in October, slowing down significantly from September’s 0.4% increase. That brought the annual core inflation rate down to 3.5%, its lowest since April 2021. As a
result, optimism continues to grow that the Federal Reserve is done with hiking rates.

Second, we have support that the economy continues to expand. Third-quarter GDP, a measure of all goods and services produced during the three-month period, accelerated at a 5.2% annualized pace. Putting to bed any near-term concerns for a recession. This highlights the third factor boosting the markets recent rally, a resilient consumer who
continues to spend, which in turn, is also boosting corporate profits.

November’s gains were accompanied by a bond rally that drove the yield on the 10-year U.S. Treasury note down to 4.34%, from just above 5% in late October. That’s the biggest monthly slide since 2019 and boosted sentiment for equities and consumers who will be able to take advantage of falling mortgage and auto loan rates.

All combined, it’s quite the combination of momentum, heading into a seasonally strong period like December. Historically speaking, the Dow rises about 70% of the time in the last month of the year, suggesting there’s a 7-in-10 chance that U.S. stocks will continue to drift higher in December.

Overall, there’s a lot of domestic optimism but the final month of the year and the start of 2024 won’t be without some headwinds. We can’t ignore the wars in Ukraine and Israel, trade gaps with China, our own political dysfunction, or the prospect that the Federal Reserve doesn’t follow it’s expected path and signals another rate hike instead of a cut.

As a result, we will continue to monitor the labor markets, Fed commentary leading up to it’s Dec 13th meeting, as well as reports on consumer confidence and key economic factors like mortgage rates, home sales, and inflation data.

Heading into the final stretch of the year, our sense is that the recent market rally will broaden, lifting sectors including health care, real estate, financials and utilities. Sectors that haven’t performed as well as tech and communications, but are undervalued and offer positive long-term growth and income.

Holiday Jokes For Family and Friends

A special holiday gift to you! Here are some of the web’s best holiday jokes, puns, and one-liner to entertain your family, friends, & co-workers this holiday season.

Did you hear that Santa knows karate? He has a black belt.

On the 13th day of Christmas, my true love said to me, I think I might be a hoarder.”

What kind of Christmas music do elves like? Wrap music!

What’s a parent’s favorite Christmas carol? Silent night!

What does the Gingerbread Man use to make his bed? Cookie sheets!

Why was the broom late to the Hanukkah party? It over-swept.

What’s the most popular Christmas wine? “But I don’t like Brussels sprouts!”

Which hand is best to light the menorah with? Neither, it’s best to light it with a
candle.

What’s the Grinch’s least favorite band? The Who.

What do you get when you cross a snowman with a vampire? Frostbite.

Why did the gingerbread man go to the doctor? He was feeling crummy.

Knock, knock! Who’s there? Irish. Irish who? Irish you a Merry Christmas!

Where does the polar bear vote? The North Poll.

You know you’re getting old when Santa starts looking younger.

How much Hanukkah gelt (money) did the skunk get? One cent.

Buy your kids / grandkids batteries with a note saying, “Toys not included.”

My New Years resolution is to read more so I’m putting the subtitles on my tv.

Last year, I was able to keep all of my New Year’s resolutions…tucked away in a
journal on my bookshelf.

Knock Knock. Who’s there? Radio. Radio who? Radio not, it’s a New Year.

Trivia

  1. How many millions are in a trillion? Click for Answer
  2. How long is a fortnight? Click for Answer
  3. American soldiers have often been referred to as “G.I’s.” What does G.I. stand for? Click for Answer
 

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