A version of this story first appeared in the CNN Business Before the Bell newsletter. Not a subscriber? You can subscribe here. You can listen to the audio version of the newsletter by clicking on the same link.
We've reached the final before the bell rings in 2023, and what a difference the last 12 months have made.
“We're in the salad days of the new year — that period when many feel refreshed, motivated and perhaps even optimistic about the year ahead,” she wrote during the first week of trading in 2023. “There's a certain clarity that comes during this time in January.”
“However, the big question weighing on everyone's minds is whether or not the United States will enter a recession this year.”
Well reader, that didn't happen.
Inflation has eased, the Federal Reserve has signaled that a shift toward lower interest rates is imminent, economic data remains strong and the labor market is resilient. Meanwhile, stocks reached record highs.
At this point in 2022, US stocks, represented by the S&P 500, have lost about 18%, and inflation is running at about 6.5%.
Fed Chairman Jerome Powell warned at his latest meeting that the Fed will “stay the course” and keep raising interest rates until the job is done. last year.
Since then, inflation has more than halved to 3.1% (as of November), and the Fed has kept interest rates stable during its last three meetings. Policymakers expect three interest rate cuts next year And stocks responded — the S&P 500 rose 23% in 2023.
This doesn't mean everything was smooth sailing.
Let's take a look at some of the events that caused stocks to rise and led to their collapse this year.
January 19: The United States has reached its $31.4 trillion debt ceiling set by Congress, forcing the Treasury Department to begin taking extraordinary measures to keep the government paying its bills. Markets fall but recover quickly.
Early in March: Silicon Valley Bank and Signature Bank collapsed after a stunning 48 hours that saw bank failures and a capital crunch resulting in the second and third largest financial institution failures in US history. US banks post their worst performance since 2020 and a regional banking crisis ensues. UBS is buying Credit Suisse in the biggest bank rescue since 2008.
May 1: JPMorgan acquired First Republic Bank, which became the second-largest failed bank in US history, pushing the Silicon Valley bank to third place and Signature to fourth place.
May 25: Nvidia released a massive earnings report, sending its stock soaring, sparking a frenzy around artificial intelligence and putting the company on track for the best market performance of the year.
Early June: Congress successfully suspended the country's debt cap until Jan. 1, 2025, averting the first-ever U.S. debt default just days before the deadline. Markets barely react.
June 8: The S&P 500 rose to end the day in a bull market, marking a 20% rise since its recent low, which it reached on October 12, 2022. This puts an end to the bear market that began in January 2022.
June 14: The Federal Reserve is pausing its historic campaign to raise interest rates to fight inflation after raising interest rates 10 times in a row. Markets explode higher.
August 2: Fitch Ratings lowers its rating on US debt From the highest rating of AAA to AA+Pointing to the “continuous deterioration in governance standards.” US markets sell off on news: Nasdaq has its worst day in five months.
September 14: After nearly two years of drought in the IPO market, UK-based chip designer Arm has made a successful debut on the Nasdaq, with the largest IPO of the year. The arm ended the day up 25%.
October 7: Hamas attacks Israel, leading to a conflict that still rages.
October 19: The yield on 10-year US Treasury bonds reached 5% for the first time since 2007, as strong economic growth and rising inflation pushed yields higher.
December 13: The Federal Reserve is keeping interest rates steady for the third straight meeting and indicates that three rate cuts are expected next year. Markets are consolidating.
December 20: The Dow Jones is at its fifth straight record high, and the S&P 500 is just a few points away from breaking its January 2022 record.
Thank you so much for joining Before the Bell through all of this.
We will be back in January to do it again next year. I'll see you later.
U.S. mortgage rates continued to fall this week — good news for homebuyers facing the most affordable housing market since the 1980s, my colleague Anna Bahne reports.
After falling below 7% last week for the first time since mid-August, interest rates fell again this week. The 30-year mortgage interest rate fell to an average of 6.67% in the week ending Dec. 21, down from 6.95% the week before, according to data from Freddie Mac released Thursday. A year ago, the average 30-year fixed rate was 6.27%.
It was the eighth straight week of declines, weighed down by expectations of interest rate cuts by the Federal Reserve starting next year.
The scion of Europe's richest family has reportedly begun the process of adopting a former gardener in middle age, and plans to leave at least half of his €12 billion ($13 billion) fortune, my colleague Hanna Ziadi reports.
Nicolas Bouche, 80, a fifth-generation descendant of the founder of French luxury goods company Hermès, wants to cancel a contract that would transfer his fortune to the Isocrates Foundation, which he founded, and make his employee a legal heir instead.
The charity objects to Bush's plan to sever ties, which it says it only recently learned of. “From a legal point of view, unilaterally canceling the inheritance contract appears invalid and baseless,” the organization said in a statement shared with CNN on Wednesday.
“The Foundation therefore opposed canceling the contract, while leaving the door open for discussions with its founder.”
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”