As we near the close of 2023, there are numerous reasons for investors to embrace gratitude. Here are six compelling reasons:
1. Flourishing Stock Performance:
The S&P 500 has surged this year, defying numerous worries and uncertainties. Despite skepticism around our bullish stance at the start of the year, the market has aligned closely with our expectations. It's been a stellar year for stocks, offering investors ample reason to smile.
2. Upward Trajectory of Stocks:
Our bullish outlook on equities remains intact, anticipating an economy that will pleasantly surprise next year, sustaining the ongoing bull market. Technically, the upward trend suggests potential substantial gains, projecting a target of 5,300 for the S&P 500, roughly an 18% increase from current levels.
3. Robust Consumer Strength:
Contrary to projections of a faltering consumer base, the economy continues to witness a resilient consumer. Job additions of about 200,000 per month and rising real wages showcase the consumer's robustness. Although some minor concerns persist, they remain below pre-COVID levels, indicating a sturdy consumer market.
4. Pervasive Fear:
Fear remains a prevalent sentiment in the market, contributing to the notion that the stock market often climbs a 'wall of worry.' Despite surveys suggesting pessimism, the hard data reveals interesting investor behavior, with retail investors selling stocks at historic rates in October—a contrarian indicator often seen at market lows.
5. Strengthening Manufacturing:
After a challenging phase, manufacturing is displaying signs of a rebound. Contrary to softer survey data, hard facts indicate a potential turnaround, possibly driving growth in the coming year. Initiatives like the CHIPS Act stimulating high-tech manufacturing within the U.S. augur well for future productivity and economic expansion.
6. Year-End Rally Prospects:
The historical playbook for 2023 has been unfolding remarkably, with a strong first half, a weaker Q3, and prospects of a robust year-end rally. With the S&P 500 already up by in November, there's optimism for further gains before the year concludes.
In Gratitude for the Markets: Despite pervasive concerns and alarming headlines, the positive elements have outweighed the negatives for investors this year.
As we anticipate a robust 2024, we extend warm Thanksgiving wishes, hoping everyone finds solace, enjoys great food, and cherishes moments with loved ones.