Global Market – Review of 2023 – Part 2
We have covered from January 2023 to May 2023 in a flash back 2023. In today’s article we will cover from June 2023 to December 2023 and how rally in last 1 – 2 months has changed global market narrative.
June 2023
• U.S. suspends debt ceiling limit till next U.S. Presidential election, till 1-Jan-25.
• Non-defense discretionary spending would be “roughly flat” at current year levels in 2024, “when factoring in agreed upon appropriations adjustments,” according to White House officials.
• ECB hikes rate by 25-bps to 4.00%. ECB guides for continuation of rate hike to bring long term inflation at 2% and to keep interest rate higher as long as necessary.
• BOE – Bank of England raises rates by 50-bps to 5.00%, highest level since 2008.
July 2023
• U.S. CPI & Core CPI inflation data for June 2023 came in July 2023 was below market estimate. Inflation rise in June 2023 was lowest growth since April 2021.
• Key risk indicator – Dollar Index was trading @ 100.80 & US 10-year bond yield @ 3.83%
August 2023
• Fitch downgrades U.S. ratings to AA+ from AAA. Rating downgrade expects fiscal deterioration over next three years.
• BOE raises rates by 25-bps to 5.25%. China cuts RRR rate in a bid to support economy.
• Jackson hole symposium – U.S. Fed chair Jerome Powell indicated interest rate to remain higher.
September 2023
• U.S. & China’s economic data – indicates mix picture. Top two economic indicates opposite trends and interest rate policy by the respective central banks.
• Brent oil rose above $90 a barrel for the first time since November as the largest OPEC+ producers extended their supply cuts to year-end.
• U.S. Fed keeps rate unchanged on 20-Sep-23, indicates rate hike cycle may be done but signaled rate to remain higher for longer period of time.
October 2023
• ISRAEL-HAMAS war started in first week of October 2023 over the weekend, providing trigger to risk-off sentiment and resulting in surge in crude oil & Gold.
• US bond yield was trading at highest level since 2007. US 30-year bond yield above 5% while 10-year bond yield around 5%.
November 2023
• Bank of Japan continue to maintain interest rate at -0.10% and US Fed keeps interest rate unchanged in first week of November 2023.
• In Diwali special article – we have focused on SAMVAT 2080 could belong to Gold, Oil, Inflation & Interest rate globally.
• US Fed meeting minutes – “Proceed Carefully” – indicating pause by US Fed and one more rate hike which was expected earlier is now ruled out after recent US FOMC meeting minutes.
December 2023
• Global sentiment has turned positive after US Fed meeting minutes.
• Global market rallied in range of 3% to 7% in the month of November 2023 and setting the trend for December 2023 on positive note.
Equichain Wealth Advisors: Market View & Opinion
Global market closed the year 2023 on high note and the key reversal came from November 2023 and clear trend emerge post US Fed meeting minutes which highlighted – “Proceed Carefully”. Now if we look back and compare to Jackson Hole Symposium event in August 2023, which indicated interest rate to remain higher for longer period of time.
We strongly believe that positive news from global central banks has been factored and now the focus will shift to corporate earnings.