Market Update
The year 2023 was dominated by inflation and the Federal Reserve's restrictive policy in response to it. The year began with inflation at about 6.5%, with the Fed raising interest rates despite fears of rising unemployment and an economic recession. But while the focus remained on inflation, several other events occurred during the year, including the political battle over the debt ceiling and a potential government shutdown; the collapse of several banks; labor strikes; and unrest in the Middle East. In March 2022, the Federal Reserve began to aggressively raise interest rates as part of a restrictive policy aimed at reining in escalating inflation. In 2023, there were signs that the Fed's monetary policy was paying off. Price growth slowed, apparently without triggering a recession. The U.S. economy proved to be resilient in 2023. Consumers spent on both goods and services throughout the year.
As 2023 grew to a close, there were some positives to consider upon entering the new year. The GDP expanded at a greater-than-expected pace in the third quarter, and crude oil and gas prices reversed course and dipped lower. Primary inflationary indicators, such as the Consumer Price Index and the personal consumption expenditures price index, trended lower at the end of the year. If interest rates decrease, borrowing will be available to more consumers, which should help the housing sector. Stocks enjoyed a solid bounce back in 2023. If corporate earnings continue to rebound, that would bode well for stocks in 2024.
There are factors that will come into play this year, but how they impact the economy and markets is open to speculation. How much longer will the Russia/Ukraine war last, and how much more financial aid will be coming from the United States? The Hamas/Israel conflict could expand to include other countries, impacting other lives and economies. And, of course, 2024 brings with it a presidential election.
International Markets
Inflation fell in most major countries during the last quarter of the year. Declining prices for food, energy, and goods, coupled with tightened monetary policies, helped draw down inflation. Several countries saw consumer prices, as measured by the Consumer Price Index, trend lower in November, including Canada (3.1%), Germany (3.2%), the Eurozone (2.4%), United Kingdom (3.9%), and Japan (2.9%). For 2023, the STOXX Europe 600 Index rose 12.7%; the United Kingdom's FTSE advanced 3.8%; Japan's Nikkei 225 Index gained 28.2%; and China's Shanghai Composite Index lost 3.7%.
On a Personal Note
Jeff and Peggy went to a Bluegrass Festival in Mexico. They said the music was fantastic! Drew and his family visited his brother in New York City. They learned that there's two types of "crowded". Normal, can't move crowded and then NYC around Christmas crowded. Chris and his family spent a little time in Florida visiting family and clients. The weather was a little cooler than they were hoping, but they made the most of it. Lisa had a fun filled December. It started with seeing A Christmas Carol at Playhouse in the Park, to her and David hosting their annual Christmas party, then Shelbi was home for break and they went to the Sign Museum, Christmas in downtown Loveland, and a few other Cincinnati favorites while she was here. Sam enjoyed a week with his family during the holidays. Their Christmas Eve was filled with laughs and games, including his aunt's 160 item saran wrap ball, which was a big hit! Taylor enjoyed lots of quality time with family in December, including roller skating. She was the worst one on the rink and is just glad there were no injuries.
The MDM team is looking forward to what 2024 has in store!
"Not So Silent Night" CancerFree Kids Charity Event
The MDM Wealth Management Team is excited to announce we raised over $15,000 for Cancer Free Kids, and plan to host the charity event again this year on December 6th, 2024 at the Redmoor in Mount Lookout.
