2023 Market Recap

A Data-Driven Look at the Recovery, Sector Leadership, and Shifting Global Trends

In 2023, financial markets stabilized as inflation pressures eased and rate expectations became more predictable. Nominal drivers remained supportive—monthly inflation contributions held near +3.4% to +3.9% and nominal premiums around +6% to +8%—while real rates stayed slightly negative or flat, helping reduce macro volatility and improve overall investor sentiment. 2023 Market Letter

Equities led the market recovery, with major benchmarks like QQQ and SPY consistently outperforming as growth, innovation, and margin factors strengthened. Technology, Communication Services, and Consumer Discretionary dominated sector leadership throughout the year, while Utilities and Real Estate lagged. Bonds delivered mixed results, with longer-duration exposures still showing periods of negative zero-coupon returns. 2023 Market Letter

FX trends also influenced performance, with the USD fluctuating against EUR and JPY as policy expectations shifted. These movements shaped both hedged and unhedged return profiles across global markets. Overall, 2023 marked a transition toward calmer volatility, improving equity momentum, and a shift from Monetary Tightening into Cyclical Rebound and Expansion—key themes for investors evaluating market opportunities after the disruptions of 2022.