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Jan 03, 2024

December 2023

Stocks rallied into the end of the year. The Dow Jones Industrial Average rose 4.9%, the S&P 500 advanced 4.5%, and the NASDAQ jumped 5.6%. Small-caps had a particularly standout month, as the Russell 2000 surged 12.2% in December. For the year, the Dow logged a 16.2% gain, the S&P 500 added 26.3%, and the NASDAQ blazed higher by 44.6%.

All eleven sectors posted a positive December. Real Estate led the way with an 8.8% increase, followed by a 7.1% advance in Industrials and 6.1% in Consumer Discretionary. Technology, Communication Services, and Consumer Discretionary were the best-performing sectors in 2023, while three sectors recorded a down year: Energy, Consumer Staples, and Utilities.

Mortgage rates retreated lower in December as the 15-year fell below 6% for the first time since May 2023, and the 30-year ended below 7% for the first time since mid-August. The average retail price of gas reached its lowest level of 2023 in December, which was $3.18 per gallon. Cryptocurrencies officially put a significant rebound year in the books; Bitcoin added 11.7% in December for a total gain of 153.7% in 2023, and Ethereum advanced 13.3% last month to wrap up the year with an increase of 90.95%.

Treasury yields fell further in December as investors continued to pile into equities. Longer-term instruments saw larger declines, as yields on the 20-year and 30-year fell by 52 and 51 basis points, respectively. The 5-year and 10-year both tumbled below 4%. However, bond ETFs experienced price appreciation in December as a result of falling yields; the iShares 20+ Year Treasury Bond ETF (TLT) popped higher by 8.7%, and the iShares Core US Aggregate Bond ETF (AGG) rose 3.7%.

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