Market Commentary: Top Charts From 2023 Set the Scene For 2024


Top Charts of the Year

What a year it has been! The economy surprised, the consumer remained resilient, stocks soared, and even bonds did well on the year thanks to a late-innings rally. Just like everyone called it, right?

As we look ahead to 2024, we want to share with you some of our team’s favorite charts on the year. Some are perhaps unorthodox, but they tell us a lot about 2023 while setting the scene for 2024.

  • Carson’s team provides its top charts that tell the story of 2023, including the four-year presidential cycle, high-tech manufacturing, bond yields, equity style performance, and a certain chipmaker that received a lot of attention.
  • We also review improving consumer sentiment, boosted by falling gas prices, lower mortgage rates, and rising stock prices, as well as structural factors contributing to a more positive outlook for households.

The Year Played Out as Expected

Ryan Detrick, VP and Chief Market Strategist

You might not believe it, but 2023 played out just as expected. Pre-election years are usually strong, but they are even better under a first-term president, with the S&P 500 up more than 20% on average.

Breaking the four-year presidential cycle down by quarters, stocks tend to do quite well the first half of a pre-election year, catch their breath in the third quarter, and gain into year end. Does that sound familiar? Below is a chart I’ve probably shared 100 times in the past year, but I’m still amazed how well it all played out.

Inflation was Expected to Come Back to Earth

Here’s another of my favorite charts, which we started sharing late last year. It captures one of the main reasons we expected to see inflation fall and the Fed to pivot from its hawkish stance.

The chart includes private data from Apartment List, which show that rent prices collapsed well ahead of the government’s data. The government’s data lags by many months, and this was a subtle clue that shelter (40% of the core Consumer Price Index) was likely going to crack eventually. Sure enough, late last year shelter inflation began to slow and the Fed began to pivot at its final policy committee meeting of the year, which concluded Dec. 13.

The Manufacturing Renaissance is Here

Sonu Varghese, VP and Global Macro Strategist

I’ve never seen an economic chart like this, especially one related to factory construction. This is a massively underrated story of what’s happening in the U.S. right now, and it brings together several key themes that center around a renaissance for American manufacturing:

  • Reshoring
  • Business investment into high-tech equipment, such as semiconductors (largely driven by artificial intelligence hardware needs) and EV batteries
  • Significant incentives from the federal government to spur private investment in transformational technology

This is not just a 2023 story. More expansion is coming, and the fruits of these investments will be seen over the next decade in the U.S.

Artificial Intelligence Grabs the Spotlight

Jake Bleicher, Portfolio Manager

To me, the narrative of 2023 is captured by a chart showing the performance of NVIDIA, the maker of high-end computer chips that have become the bedrock of artificial intelligence (AI). Emerging from the depths of the 2022 bear market, the introduction of ChatGPT illuminated the potential of AI for the layman, igniting a remarkable surge in related tech stocks. Despite higher interest rates, mega-cap technology companies roared higher. As we approach 2024, the AI theme appears enduring. But investors are now recognizing its broader implications as this transformative technology permeates businesses of all shapes and sizes, not just mega-cap tech.

Source: FactSet 12/18/2023 

Yields Back Where They Started

Barry Gilbert, VP and Asset Allocation Strategist

Nothing tells the story of the 2023 markets like yields, and the 10-year Treasury yield is a great reference point. We can read its movements in all the big stories of 2023: accelerating disinflation, an aggressive Fed, and a thriving U.S. economy, despite the skeptics.

The 10-year Treasury yield entered the year at 3.88%. At that point, it looked like rates might be starting to stabilize after peaking near 4.2% in October 2022 and causing a heap of pain since the summer of 2020. But the Fed was determined in its fight against inflation as the economy continued to defy expectations. By mid-October, the 10-year Treasury yield was just short of 5% and at a level not seen since before the global financial crisis.

But then a funny thing happened. The disinflation expected by many accelerated, economic growth went from great to just pretty good with a few downside economic surprises, and a tough-talking Fed began to use more balanced language. The floodgates of bond demand opened up and the 10-year Treasury yield plummeted more than a full percentage point in about two months, taking it back to just a little higher than where it started the year.

With the yield curve flat, no movement in the 10-year yield over the course of the year left returns for short-term Treasuries and intermediate bonds about the same. But if investors were willing to shy away from rate-sensitive bonds early in the year and add rate sensitivity aggressively late (consistent with Carson Investment Team recommendations), it was a pretty good round trip.

We often connect our “no recession in 2023” call to our equity overweight, but it may have had a more profound impact, especially in bond-heavy allocations, on the fixed income side. That’s another reason the 10-year Treasury yield is my candidate for 2023 chart of the year.

Value and Growth Also Back Where They Started

Grant Engelbart, VP, Investment Strategist

The decision to invest in value or growth stocks is one of the most impactful an equity investor or manager can make, and something I keep a close eye on. The year 2022 was painful across asset classes (sorry to bring it up!), but on a relative basis value investors did quite well. Now relative performance doesn’t pay the bills in a down year, but value did provide some help in 2022 by outperforming growth stocks by the most since the tech bubble burst in 2000.

As we know, the stock market tends to react in ways that go against the expectations of the crowd. And sure enough, in 2023 growth stocks began to outperform value stocks, and they continued to do so in dramatic fashion. In 2023, growth outperformed value by the second most since the inception of the widely followed Russell style indices (1979).

My chart of the year shows the returns of value and growth stocks relative to the broad Russell 1000, which encompasses both. Since the beginning of 2022, all the outperformance of value stocks has been washed away by the growth rebound in 2023. The game is tied 0-0, right back where we started! If these massive divergences don’t beg for a balanced investing approach with research-driven decisions around portfolio adjustments, I don’t know what does.


It’s been a puzzle as to why Americans seem to have been in a funk despite strong economic growth, low unemployment, rising incomes (even after adjusting for inflation), and even strong consumption trends. In other words, Americans have been out and about spending, on the back of strong incomes, but confidence has been plunging. In fact, the University of Michigan consumer confidence index has hit levels below those seen in 2020 amid the pandemic, and even levels recorded during the global financial crisis. The Conference Board’s measure has not been as bad, but even that index has recorded numbers below pre-pandemic levels.

However, this may be changing.

‘Twas the Season to Be Jolly, and It Seems to Be Catching On

Both measures of confidence have now risen for two consecutive months. In December, The Conference Board recorded the largest monthly increase since early 2021.

There are three primary reasons confidence is rising.

One, stocks have rallied recently. The S&P 500 climbed more than 15% since Oct. 27, which was when Carson’s chief market strategist, Ryan Detrick, called the bottom for this most recent downturn. This surge has led to the S&P 500 gaining almost 26% in 2023, including dividends. That’s cause for cheer by itself, but it’s even better considering that gain has entirely erased 2022’s losses.

Two, gas prices have fallen 20% since mid-September. Nationwide, average gas prices have fallen from $3.88/gallon in mid-September to $3.12/gallon. That’s as good a way to usher in the New Year as any. Gas prices are perhaps the most salient part of inflation, and lower prices give households the perception that inflation is easing, never mind what official data suggests.

Three, 30-year fixed mortgage rates have fallen from 8% to almost 6.5%. Thanks to markets pricing in interest-rate cuts by the Federal Reserve this year, mortgage rates have fallen sharply. While 6.5% is higher than the mortgage rate most homeowners pay, which is 3-4%, a massive cohort of 25-34-year-olds want homes but are being priced out, assuming they can even find a home to buy. Lower mortgage rates boost perceptions of home affordability.

These three trends combined with three conditions already in place creates an even more encouraging market picture.

The labor market continues to run strong. The data has shown the labor market has been strong for a long time, with the unemployment rate below 4% throughout last year. But perhaps more importantly for consumer confidence, the perception of the labor market has improved. From The Conference Board’s consumer survey in December, the percentage of respondents saying “jobs are plentiful” rose 2.1 points to 40.7%, while the percentage of respondents saying “jobs are hard to get” fell by 2.4 points to 13.2%. The “labor differential,” which is the difference between the two, edged up 4.5 points to 27.5, which is close to pre-pandemic levels and means that Americans are feeling good about the labor market.

Home prices are rising and are currently at record levels. The Case-Shiller National Home Price Index has risen for eight straight months (through September), increasing 3.8% during this period and more than erasing 2022’s downturn. For middle-income households (25th to 75th percentile), most of their wealth is tied up in their homes and stock ownership is relatively low. So, rising home prices is a boost to household net worth. Even if households can’t access that wealth due to higher mortgage rates, having a higher net worth is cause for cheer.

Savers can now get higher rates in savings accounts, CDs, and money market funds. For a decade after the global financial crisis, a common refrain was that the Fed was “punishing” savers. Well, that’s changed. Thanks to aggressive rate hikes that took the federal funds rate to the 5.25-5.5% range (the highest in 20-plus years), savers can earn a lot more on their savings. Of course, enjoy it while it lasts, because rates have probably peaked, and it’s likely the Fed will cut rates by about 1.0% this year.

This wonderful cocktail of positive developments for American households is welcome news around the holidays. Households were already fairly positive about their own finances (also witnessed by their willingness to spend), but now their perception of the broader economy is turning up.


This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services.

A diversified portfolio does not assure a profit or protect against loss in a declining market.

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