2023-12-29 23:19:00
Published30. December 2023, 00:19
United States: A euphoric 2023 ends for Wall Street
Wall Street will have experienced a year 2023 as euphoric as it was unexpected and the indices concluded the year on Friday not far from records.
Analysts are betting on average profit growth of 12% in 2024.
AFP
The year 2023 on Wall Street will have been that of a euphoric and unexpected rebound, accelerated in the last two months by the markets’ certainty that inflation is disappearing and that the end of high interest rates is looming in the United States. United. On Friday, the indices concluded with a decline but not far from records, in a deserted market at the end of the year.
The Dow Jones index lost 0.05% to 37,689.54 points. The Nasdaq, with a strong technological coloring, fell by 0.56% to 15,011.35 points and the S&P 500, only 1% from its historic record, dropped 0.28% to 4769.83 points. But over the year as a whole, driven by the firm hope that the economy will land softly after having brought down inflation, the Dow Jones gained almost 14%.
The S&P 500, the most representative of the market, is 1% from its all-time high in January 2022, up 24% over the year. Finally, the Nasdaq soared by more than 43%, equipped with the “Magnificent Seven”, the mega-capitalizations of technology, such as Microsoft, Alphabet and Nvidia which notably benefited from the frenzy of the development of artificial intelligence.
Tesla and Nvidia
However, the year saw “a rise in interest rates” from the American central bank (Fed), which is generally unfavorable for stocks because it makes business investments more expensive, but also “a mini-banking crisis, the strikes, and a worsening geopolitical situation,” recalled Art Hogan of B. Riley Wealth Management.
The year 2023 began with expectations of a recession supposed to be caused by the tightening of monetary policy “but it never materialized,” recalled Maris Ogg, portfolio manager for Tower Bridge Advisors.
Americans not convinced
“We started in fear of a recession and ended in complete euphoria with the idea that interest rates will fall. Now that the market has already taken all of this into account, it could be much more dependent on company results in 2024,” she says, believing in a more difficult year ahead for company margins. However, analysts are counting on average profit growth of 12% in 2024.
The brilliant performances of Wall Street, so far in any case, have hardly dazzled the Americans who “continue to complain about the economy and who do not feel prosperous,” adds the expert from Tower Bridge Advisors. Jobs are still plentiful, with only a 3.7% unemployment rate, and Americans’ real estate assets have further increased in value.
But “they find that the economy is not as good as it was a few years ago and that will undoubtedly handicap Joe Biden”, if he is the Democratic candidate for the presidential election the year next time, underlines Maris Ogg. The octogenarian is at an all-time low in popularity compared to his predecessors in the White House less than a year before the election. A Gallup poll in December showed that only 39% of Americans approved of his action.
(AFP)
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