After a challenging start to the final quarter of the year, the markets surged to life with the Federal Reserve announcing at least three planned rate cuts in 2024. The stock market posted its 5th best year in the last 20 years. Stocks surged in November and December, erasing a tough October to finish the quarter sharply higher. The last two months of the quarter saw the S&P 500 advancing for nine weeks straight.Overall, 2023 was really a tale of two markets, with mega cap technology stocks having much stronger performance than the rest of the markets. The S&P 500 was up about 26% for the year. However, the “magnificent seven” stocks (Apple, Microsoft, Tesla, Nvidia, Amazon, Alphabet and Meta) accounted for over half of the gain in 2023.Inflation pressure continued to ease in the fourth quarter. While we have seen a significant improvement from the 9.1% peak in June of 2022, there is still a way to go to reach the Federal Reserve’s target of 2%.

Navigating the markets in 2024 will present many of the same challenges and opportunities we saw last year. However, there are three areas to which we will be paying close attention. 1.Monetary policy of the Federal Reserve Board will dictate much of the mood in the markets. There are eight Federal Open Market Committee meetings in 2024 and although it is currently anticipated that rates will go down, the Fed remains committed to achieving the 2% inflation rate goal and intends to adjust rates accordingly should inflation pressures have a resurgence. 2.Geopolitical risks may also resonate through the markets should the tensions escalate, or hopefully, find resolution. Uncertainty within these issues are a key fear for equities and we will continue to keep an eye on how they may affect the equity markets.3.Results of the 2024 U.S. presidential election will influence future tax policy and government expenditures, potentially impacting the general economy.

While the crystal ball is always a bit hazy, it’s clear that 2024 holds promise and challenges in equal measure. The key, as always, is to stay informed, remain adaptable, and approach the market with a diversified and thoughtful investment strategy. We remain focused on informed, long-term planning and a diversified approach.

This information is not intended to be a substitute for specific individualized tax, legal, estate, or investment planning advice as individual situations will vary. Please discuss these matters with the appropriate professional. Opinions expressed are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. This information has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that these statements, opinions or forecasts provided herein will prove to be correct.Investing involves risk and you may incur a profit or loss regardless of strategy selected. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Forward looking data is subject to change at any time and there is no assurance that projections will be realized