Market Watch: Inflation Slows, GDP Surges, Evergrande Liquidates

Chinese Real Estate

Market Watch: Inflation Slows, GDP Surges, Evergrande Liquidates

SPY
S&P 500

Last Week: 1.03%
YTD: 2.55%
1 Year: 22.27%

DIA

Dow Jones Industrial Average

Last Week: 0.66%
YTD: 1.18%
1 Year: 14.52%

ONEQ
NASDAQ

Last Week: 0.94%
YTD: 2.82%
1 Year: 36.16% 

Russell 2000

Last Week: 1.84%
YTD: -2.36%
1 Year: 5.49% 

Large Growth

YTD: 3.97%
1 Year: 37.96% 

Large Value

YTD: 0.37%
1 Year: 6.79%

Inflation Gauge

The Federal Reserve’s favorite inflation measure showed inflation cooled at the end of 2023. The Commerce Department’s personal consumption expenditures price index for December showed an increase of 0.2% on the month and up 2.9% on an annual basis, excluding food and energy prices. This was below analysts’ estimates of increases of 0.2% and 3% respectively. Even when adding in more volatile prices from energy and food, it showed inflation held steady and was only up 2.6% year over year. Despite coming in lower than expected, stock markets were little changed. As the inflation rate gets back to normal levels, the Fed will begin to determine a multi-year outlook on reducing interest rates.

U.S. Economic Growth

Gross Domestic Product (GDP), a common measurement of economic growth, showed a significant increase in GDP, coming in at 3.3% in Q4. Lead economists were anticipating an increase of around 2%. This large quarterly growth in the U.S. economy was led by strong consumer and government spending. GDP is also a lagging indicator used to determine if we are in a recession. Given the growth in the economy, it is safe to say the U.S. has avoided a recession at the end of 2023, and the Fed has remained vigilant in reducing inflation without causing a large recession so far. The idea of a soft landing is still very much on the table, mostly in part from strong consumers and household spending. 

Chinese Property Developer Forced to Liquidate

China Evergrande Group, once the largest property developer in China, has been ordered to liquidate by a Hong Kong court. The multi-year saga of China Evergrande’s default has crushed China’s real estate market. The company’s creditors tried to reach a deal over the weekend but were unable to do so. The liquidation of properties and assets is likely to have another large impact on the Chinese real estate industry. Since the initial default, multiple large developers have filed for bankruptcy as banks pulled back funding and property values took sharp declines.

  • Alex Wolfe

    Alex is a Certified Financial Planner™. He brings nearly a decade of experience working with individuals, families, and business owners. Prior to working for Base Wealth Management, Alex worked for Fidelity Investments and an independent wealth management firm in Venice, FL. Through many years of practice, he specializes in helping clients navigate their financial goals through comprehensive financial planning. He received his bachelor’s degree in economics from Texas A&M University.

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2022 Tax Document Information

As a Base Wealth Management client, you should receive your paper tax documents via mail in the coming weeks. Or, if you previously had an online account with Pershing’s NetX360, you should be able to access your 2022 tax documents through that portal. 

If not, or if you experience any issues, please reach out to Tim O’Brien (tim.obrien@intervestintl.com).

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