December 2023 Market Commentary

The S&P 500 officially closed 2023 at 4,769, which marked a whopping +26% return including dividends, and it was led higher by two technology giants that each posted triple-digit percentage gains for entirely different reasons. U.S. stocks closed modestly lower on the last trading day of 2023 and capped a robust year-end rally as investors eyed easier monetary policy in the year ahead. Meanwhile, Canada’s main stock index also ended higher on the final trading day of the year, wrapping 2023 with gains powered by a boost in energy and financial stocks to finish with a +8% total return. Although Canada faced a tougher year than its’ U.S. counterpart, Canadian stocks managed to snap back in the last few weeks of trading, entering 2024 with fresh hopes of an interest rate cut by the Bank of Canada.

With 2023 behind us and the major stock market indices have climbed the proverbial wall of worry, there are many reasons to be optimistic and bullish on stocks in 2024. The economy is on strong footing, the consumer and the stock market has been resilient, inflation is decelerating sharply, and earnings continue to surprise. What else is there to say really? The path to normalized interest rates, inflation, and market behaviour (based on fundamentals) is underway and 2024 may not prove to be much different from 2023, in terms of volatility, but it is expected to bring lower interest rates and another calendar year of positive market returns. We look forward to sharing our 2024 earnings forecast for the TSX and S&P 500 in our year-end outlook comments.

For a full copy of our monthly market commentary, please email us at mmbwealth@nbpcd.com