To The Moon

Last Week's Recap

The US Market -SPX logged a 24% gain in 2023

• Stocks bounced back in 2023 after a rough 2022. The story for the better part of the year was the excitement around artificial intelligence fueling big gains for the “Magnificent 7” stocks.

• The S&P 500 rode 9-week win streak to end 2023 with a surprising 24% gain. The Dow closed at 37,689.54 and it finished the year with a 13.7% gain and notched a new record during 2023. The Nasdaq jumped 43.4% for its best year since 2020 on AI enthusiasm.

• The small-cap Russell 2000 rose more than 12% in December and clinched its best month since November 2020. It notched 15.09% for 2023.

• With the Federal Reserve signaling it is likely done with rate hikes, and could even cut rates multiple times next year, the 10-year Treasury yield dove from above 5% in late October to less than 3.9% on last trading session. As rates fell and labor data remained strong, investors ended the year growing more confident in a possible “soft landing” where the U.S. economy avoids a recession.

• U.S. crude oil closed out the year more than 10% lower as bearish sentiment has taken over due to worries that the market is oversupplied from record production outside OPEC.

The US Sectors & Stocks - SMH jumped more than 70% last year

• 9 of S&P 500 sectors rose for 2023, except the utilities and consumer defensive sectors. The technology sector was the best performance. Nvidia (NVDA) was the year's top gainer in S&P 500 components with a gain of 253%.

• The Semiconductor ETF（SMH）jumped more than 70% for the whole year. AVGO、AMD and INTC rose by 105%、136% and 97%, respectively.

• Meta Platforms（META） was the second top performers, with shares up 194% and the social media giant registered for its best year ever.

• Cathie Wood’s flagship ARK Innovation ETF (ARKK) was up 68% in 2023. Its top holding Coinbase （COIN）jumped 391% as BTC rallied.

• Palo Alto Networks（PANW）、Uber（UBER） and Tesla （TSLA）round out the list of companies that have seen shares at least double in 2023.

• Cruise operators Royal Caribbean（RCL）and Carnival （CCL）surged 170% and 142%, respectively.

• Reuters report said that the SEC may notify Spot Bitcoin ETF issuers of the clearance to launch the securities product as soon as Tuesday or Wednesday.

Hong Kong Market - HSI lost 14% in 2023

• Hong Kong stocks logged an unprecedented fourth year of losses as trading volume shrank to the lowest since 2019.

• The Hang Seng Index, comprising 82 members, has fallen about 14%, making it the worst among major stock indices worldwide. The city’s broader stock market lost US$523 billion of market value in 2023.

• The Hang Seng Index’s registered 3.8% gain in the last trading week of 2023 offered some consolation for investors in another poor year for Hong Kong.

• Hong Kong stock exchange’s IPO ranking sank to 8th this year, with fundraising slumping to US$5.9 billion from 68 listings.

Singapore Market - STI logged a slight loss of 0.34% in 2023

• In 2023, Singapore stocks registered a slight loss of 0.34%. Local shares ended the final trading session of the year on a high, as traders looked to capitalise on opportunities available in the capital markets. The Straits Times Index (STI) rose 3.18% for last trading week to close at 3,240.27.

• Singapore’s economy grew 1.2% in 2023, and is expected to grow by 1 to 3% in 2024, “but much will depend on the external environment”, said Prime Minister Lee Hsien Loong on Sunday (Dec 31) evening in his annual New Year Message.

• “In summary, 2023 presented a tumultuous journey marked by economic and financial upheavals. However, robust growth in real spending played a crucial role in maintaining relatively tight labour market conditions, defying earlier predictions,” said SPI Asset Management’s managing partner Stephen Innes in a note on Friday.

Australian Market - The ASX 200 sealed a 7.8% annual advance

• The Australian sharemarket sealed a 7.8% annual advance in 2023. The S&P/ASX 200 index booked its best return since 2021.

• The benchmark rose 1.09% last trading week to close at 7590.8 on Friday. It is within 50 points of the record high set in August 2021.

• Heavy rains lashed parts of Australia's east, triggering flash flooding, inundating roads and bringing more pain for some residents. The northeastern New South Wales and southeastern Queensland regions were pounded by a wild weather system overnight, with several towns taking roughly a month's rainfall over 24 hours to Monday morning.

The Week Ahead

Macro Factors - A correction is probably in the first quarter

• Momentum continues to remain favorable heading into 2024. This week's economic data will be highlighted by Friday's employment report. The economist consensus calls for a gain of 155,000 nonfarm payrolls during the month, versus 199,000 in November. The unemployment rate is expected to come in at 3.8%, up from 3.7%.

• The BLS will release the Job Openings and Labor Turnover Survey on Wednesday. That is expected to show 8.75 million job openings on the last business day of November, which would be a slight increase from a month prior.

• Last week saw the biggest net flow into U.S. equity funds in six months, and the National Association of Active Investment Managers’ weekly equity exposure gauge shows this group leveraged long stocks for the first time since the summertime market peak in late July.

• Jeff deGraaf of Renaissance Macro says the momentum and breadth displayed by the rally since October outweighs concerns about stretched sentiment for now. He allows that a first-quarter setback appears fairly likely but the trend places him in buy-the-dips mode, with anticipated downside in any correction probably reaching only to about 4600 on the S&P, down 3-4%.

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