Daily Market Commentary

December 26, 2023

Bonds & Stocks
The final week of 2023 is expected to be much quieter on Wall Street after a ferocious rally that put the US stock market within a striking distance of its record. Equities barely budged on Tuesday, following the S&P 500's longest weekly run since 2017. The Federal Reserve's dovish pivot this month fueled risk appetite in a surge that brought the American stock gauge less than 1% away from its all-time high while leading to warnings about a pullback.

Economy
The sharp drop in stocks and jump in the VIX - the so-called fear gauge - on Dec. 20 is a reminder that Federal Reserve Chair Jerome Powell's dovish pivot may not be the panacea for a downturn. The factors that have driven down inflation recently are key. If Powell is right that inflation can slow further without a sharp increase in unemployment, then the stock and bond rallies are justified.

World
China said it was sanctioning a US company and two human rights researchers over work related to Xinjiang, escalating a dispute between the nations over allegations of forced labor.

China was freezing any assets held in the nation by Kharon, Foreign Ministry spokeswoman Mao Ning said at a regular press briefing in Beijing on Tuesday, referring to a Los Angeles-based company that identifies sanctions and compliance risks for organizations.

The information represented herein was obtained from various sources, which we believe to be reliable. Neither the information presented nor opinions expressed constitutes an offer to buy or sell any security. And it is not intended to guide the investor on which securities to buy, or when to buy or sell.