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Market Commentary – Q4 2023

Written by Theresa Gusman

First Affirmative News, Market Commentary

Quo VADIS – Where are you going?

By Theresa Gusman


The S&P 500 advanced 11.7% in the fourth quarter, cementing a 24.3% rise in 2023. Through most of last year, the S&P 500’s narrow leadership camouflaged the paltry returns of the broader index and punished investors underweight the Artificial Intelligence (AI)-fueled stocks known as the Magnificent Seven. The rally broadened in the fourth quarter, with the equal- and market cap-weighted S&P 500 indices delivering almost identical performance.  

With the recent surge, the US equity market is fairly valued given current earnings projections. Most market observers have an overly sanguine economic outlook, in our opinion, geopolitical risks are rising worldwide, and major elections looming in the US, Russia, the EU, India, South Africa, and elsewhere. Against this backdrop, we believe markets could be choppy but return to trend increases in the mid-to-high single digits with better breadth as 2024 progresses. 

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