Market Commentary

Cutting Through The Noise: December 2023

Welcome to the latest update from Stevens Capital Partners! We believe in keeping you well-informed about the market happenings. Let's dive into the key topics that caught our attention this month.


Federal Reserve's Optimistic Shift: A Market-Friendly Tone

In their final meeting of 2023, the Federal Reserve took a positive turn by adjusting their interest rate projections, indicating the possibility of multiple rate cuts in the upcoming years. This move has been well-received by the market, with Federal Reserve Chair Jerome Powell adopting a market-friendly tone during the press conference. The S&P 500 responded positively, gaining nearly 1.4%, and 10-year government bond yields saw a decline on the day of the announcement.


Job Market Resilience and Consumer Sentiment Boost

The job market, which had been showing signs of a gradual cool down, pleasantly surprised in November with job growth reaching 199,000 and the unemployment rate dropping to a four-month low of 3.7%. While concerns about inflation control persist due to rising average hourly earnings, consumer sentiment has seen a sharp improvement as inflation expectations decrease. This positive consumer sentiment might contribute to sustained spending during the holiday season, despite challenges such as higher prices and occasional job market fluctuations.


Retail Sales Defy Expectations: Positive Momentum

Retail sales in November exceeded expectations, rising by0.3%, contrary to the anticipated 0.1% decline. This unexpected boost is attributed to lower gasoline prices, empowering consumers to spend more as the holiday season commenced. However, there are concerns about consumers' financial health, with a noticeable increase in credit card balances—up more than 10% since the beginning of the year. While this could impact post-holiday spending, it's essential to recognize the boost in retail sales and the potential positive impact on the economy.


Maintaining a Long-Term Financial Plan Amidst Market Dynamics

In summary, the economic landscape reflects a delicate balance between the Federal Reserve's positive stance, a resilient job market, and fluctuating but improving consumer sentiment. The cautious optimism from the Fed, coupled with positive employment figures, is a welcome sign. Challenges and risks persist, especially in managing inflation and market expectations, but the overall outlook remains hopeful.


As we navigate these dynamics, it's crucial to stay focused on your long-term financial plan. Remember that markets can be unpredictable, but a well-thought-out strategy provides stability and helps you achieve your financial goals. If you have any questions or concerns about your plan, don't hesitate to reach out. Your financial well-being is our top priority.


Wishing you a delightful Holiday Season this year!


1. Federal Reserve

2. CME Fed Watch Tool

3. Bureau of Labor Statistics,

4. University of Michigan’s preliminary December Consumer Sentiment survey,

5. Retail Sales

6. Consensus estimate from Bloomberg’s survey of economists

7.  Credit Card Balances

Market Commentary

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