Q4 Market Recap (2023)
Happy Holidays, and welcome to our recap of quarter four (Q4) 2023. Fourth quarter performance of the major indices is as follows: the Dow Jones gained 12.73%, the Nasdaq rose 12.80%, and the S&P500 increased 11.23%. This article will look into the major economic events of the fourth quarter, performance metrics, and other essential topics.
Let’s first take a look at recent economic data releases in Q3. Gross Domestic Product (GDP) data for Q3, which was released on December 21, showed the U.S. economy grew 4.9% based on the third revision. The U.S. economy has grown in the past five quarters.
Inflation remains above the Fed’s goal of 2.0%. The latest report showed that inflation rose by 0.1% to 3.1% in November 2023. December’s data will be released on January 11, 2023, at 8:30 a.m. EST and can be found here. The current rate range remains at 5.25–5.50%. Fed Chair Jerome Powell signaled an increased possibility of rate cuts in 2024.
The U.S. Unemployment rate shifted down slightly from 3.8% to 3.7%. The latest unemployment numbers can be found here.
The Personal Consumption Expenditures (PCE), which is the Fed’s preferred inflation measure, was released on December 22 with data for November. A change of 2.6% from one year ago is noted; the full report is available here.
The fourth quarter featured strong earnings reports and future outlooks for cybersecurity, cloud, and data stocks. As demand increased for cloud-based applications, stocks like Salesforce (CRM), Snowflake (SNOW), MongoDB (MDB), and others had strong quarters. Cybersecurity stocks like CrowdStrike (CRWD), SentinelOne (S), and Zscaler (Z.S.) also had stellar performances. Check out the image below for a breakdown of metrics:
Cryptocurrencies rallied as the stigma towards Bitcoin ETFs rose. Bitcoin gained 51%, and Ethereum rose 33% in the fourth quarter. ETFs could be approved as early as January, as the focus is on the SEC. Bitcoin halving is also nearing and is expected to occur during April 2024. Read more about Bitcoin halving here.
As we look forward to Q1 2024, markets will focus on the following factors:
- Rate cuts could be possible as inflation continues to fall towards the Fed’s goal of 2%.
- Bitcoin ETFs may be approved as soon as January, which could prompt a further crypto market rally.
All information in this article is for educational purposes only and is not to be considered financial advice. Do your own research and consult a financial advisor for advice.
Financial data provided by Google Finance.
