Last Week: 1.03%
YTD: 2.55%
1 Year: 22.27%
Dow Jones Industrial Average
Last Week: 0.66%
YTD: 1.18%
1 Year: 14.52%
Last Week: 0.94%
YTD: 2.82%
1 Year: 36.16%
Last Week: 1.84%
YTD: -2.36%
1 Year: 5.49%
YTD: 3.97%
1 Year: 37.96%
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.
