December 7, 2023

As we tread further into this holiday season, let’s grab a rake and start bagging this month’s market trends and insights. 🍂🦃

Seasonal Trends in Stock Returns: The stock market has historically shown better performance between November and April, “turkey to tax,” as opposed to the other half of the year from May to October, “mommies to mummies.” This seasonal pattern suggests potential timing strategies for investors looking to capitalize on these trends.

Stock and Bond Market Trends: This year has been another historical one for both stocks and bonds, with each experiencing significant losing streaks. For the first time, U.S. bonds saw a six-month consecutive downturn, mirroring similar patterns in the stock market. Despite such trends, November’s rebound along with the end of the Fed’s rate hikes suggests a hopeful outlook for future market performance.

Dominance of Largest Stocks in the S&P 500: In 2023, the performance of the S&P 500 Index has been largely driven by its top seven companies. These “magnificent seven” outperformed the rest of the index, illustrating the significant impact large companies can have on overall market returns.

Fluctuating Dominance Between Growth and Value Stocks: The year saw a mad scramble in the stock market with growth and value stocks taking turns in leading performance. The advent of consumer ready Artificial Intelligence (AI) surprised the world, driving growth in a value market, highlighting the importance of asset class diversification.

Short-Term Interest Rates vs. Inflation: A noteworthy shift occurred this year with inflation rates dropping below short-term interest rates. Historically, this scenario is favorable for bonds, which typically perform better when inflation is lower than short-term interest rates as they are now.

Holiday Fun Fact: “Jingle Bells” was originally written as a Thanksgiving Day song. When composer James Pierpont first wrote “Jingle Bells” in 1857, the song was titled “One Horse Open Sleigh,” and was intended to be a song for Thanksgiving. However, the melody quickly became a Christmas hit, so two years later it was re-named “Jingle Bells” and has been a well-loved Christmas song ever since. 🦃

As you prepare for the holidays, try to stay the course and give us a call if you need to discuss any changes. Enjoy your Thanksgiving leftovers! 🍁🦃🍂