Wall Street: 2023 recap - surges, risks and inflation insights
As 2023 concludes, Wall Street's Nasdaq surges 52%, S&P500 rises 22.9%, defying expectations. Fuelled by the Fed's dovish pivot, caution prevails amid highs, eyes await the Dec 23 Core PCE for inflation insights.
With just two weeks left before year-end, let's take a moment to look at how things stand on Wall Street for 2023.
- The tech-heavy Nasdaq is up 52% CYTD
- The S&P500 is up 22.9% CYTD, not quite back at the level it ended 2021
- The Dow Jones has gained 12.5% CYTD and is trading at record highs.
These numbers would have been unimaginable just seven weeks ago. But that’s precisely where things stand — courtesy of the Fed's dovish pivot. The numbers also likely help to explain why New York Fed’s president John Williams said on Friday that the FOMC isn’t “really talking about rate cuts” right now.
Williams's comments appear to be an attempt to tame the animal spirits that have been unshackled in recent weeks and push back against the market's pricing of 150bp of rate cuts next year, ahead of Friday night's core PCE index.
What is expected from the Core PCE price index?
The Feds' preferred measure of inflation, the Core PCE price index, is scheduled for release on December 23rd at 12.30 am AEDT. The consensus expectation is for Core PCE to increase by 0.2% in November, which would see the annual rate ease to 3.3% from 3.5%, on track to return to 2.5% next year. Headline PCE is expected to rise by 0% in November, with the annual rate moderating to 2.8% from 3.0%.
S&P 500 technical analysis
On Friday night, the rally from the October low saw the S&P 500 cash make a fresh cycle high at 4739. Although we remain bullish, we would not contemplate opening fresh longs at these elevated levels.
Instead, we would prefer to wait for a corrective pullback and signs of basing as an opportunity to reset longs looking for a test and break of the January 2022, 4818 high. Aware that a sustained break below the support of the 200-day moving average at 4317 would warn that the rally has run its course and that a deeper pullback is underway.
S&P 500 daily chart
Nasdaq technical analysis
The Nasdaq has followed the road map to perfection in recent months, bottoming as expected in the 14,200/14,000 support zone before a rebound to new highs.
While caution is warranted due to the appearance of a five-wave rally (Elliott Wave) from the October 10,440 low, we find it hard to imagine that the Nasdaq would come all this way and not break above the November 2021 bull market high of 16,764 before a push above 17,000.
However, should the Nasdaq see a sustained break of support at 15,600ish, it would warn that the rally has run its course and that a deeper pullback is underway towards the 200-day moving average at 14,550.
Nasdaq daily chart
- Source TradingView. The figures stated are as of 18 December 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
