Market Commentary 1 October 2023 - 31 December 2023
Our latest market update shows solid gains during 2023. This is a strong reversal from a tough 2022 year. Both bond and share markets have performed well, and the rise in interest rates over the past two years helps support income returns from here. Forecasters had predicted a global recession at the start of 2023 yet, the US economy continued to perform relatively strongly.
In the third quarter of 2023, it grew at an annualised rate of 5.2%. That’s a long way from recession. There were predictions about New Zealand, too, amid a slowdown in global activity and persistent inflation pressures. In December 2022 Stuff wrote an article, “Economists look ahead to 2023 with fear and anxiety.” One bank head of research said, “2023 will be the year when all the warning signs come home to roost… What we haven’t necessarily seen yet is people taking into consideration the potential earnings hit on equities.” By the end of the third quarter of 2023, economic activity was about 1.7% per annum growth. Unemployment was at about 3.9% (compared to 3.6% a year earlier) and house prices hadn’t fallen through the floor. In the US, the S&P 500 delivered a return over 26% in 2023, the NZX 50 was close to flat, and most bond funds had returns above 5% for the year. These aren’t exactly the kind of results predicted at the beginning of 2023.
We can expect more predictions at the beginning of 2024, and the fact is, there will always be uncertainty. By developing and implementing a financial plan with your Financial Adviser you will have a proven method to reach your goals.
Please don’t hesitate to contact us if you wish to discuss anything further.