Houston - San Felipe, TX

Stock and bond markets finished 2023 in an impressive fashion. The S&P 500 increased 11.7% in the fourth quarter, finishing the year up 26.3%. Smaller capitalization stocks as measured by the Russell 2000 increased 14% for the quarter, gaining ground on large cap stocks, but finishing the year at a lower return of 16.9%.

The third quarter of 2023 was bumpy for most asset classes. U.S. stocks were among the worst performers, with the S&P 500 falling 3.3% and smaller capitalization stocks generally down more. On a year-to-date basis, however, large cap U.S. stocks remain among the best performing asset classes, with the S&P 500 up 13%.

A key development during the first quarter was the failure of several large U.S. banks, including Silicon Valley Bank (SVB) and Signature Bank, and the subsequent scrutiny on the U.S. banking system. In addition to the bank failures in the U.S., UBS agreed to purchase Credit Suisse, furthering concerns over the banking system. Ultimately, the U.S. saw the second and third largest bank failures in the country’s history.

While 2022 lacked some of the drama that pervaded 2020, results were significantly worse across nearly every asset class over the course of the full calendar year.