Bonds & Stocks
Wall Street’s final session of the year has stocks set for their ninth straight week of gains — the longest winning run since 2004. While signs of exhaustion have emerged over the last few days, the lack of any significant catalyst and anemic trading volume have left equities drifting near all-time highs. The S&P 500 traded just steps away from its all-time high of 4,796.56. Fueled by the artificial-intelligence boom, stretched positioning and the “fear of missing out,” the US equity benchmark has risen about 25% in 2023, while the Nasdaq 100 headed for its best year since the dot-com era. Treasuries fell once again after positing solid gains in recent weeks.
Economy
The dollar is poised for its worst year since the onset of the pandemic as Wall Street bets the Federal Reserve is set to lower interest rates after reining in prices. After being whipsawed by false starts calling for the end of the Fed’s rate hiking regime, a Bloomberg gauge of the greenback is down nearly 3% this year in the steepest annual drop for the US currency since 2020. Much of the decline materialized in the fourth quarter on growing wagers that the Fed will loosen policy next year as the US economy slows. That dents the dollar’s appeal as other central banks may keep their rates higher for longer.
World
The slump in China’s housing construction will continue in 2024, dragging down economic growth and suggesting that government efforts to stabilize the sector haven’t been enough to reverse the downturn. That’s the consensus from 10 investment banks and securities brokerages, including Goldman Sachs Group Inc., Morgan Stanley and UBS Group AG. If they’re right, that leaves China on track to post three straight years of contractions in property construction, a record streak. The country’s main measure of real estate investment fell 8% on year in the first 11 months of 2023. For all of last year, the measure dropped 8.4%.