The final quarter of the year closed out one of the more perplexing periods for investment markets we’ve witnessed. Despite a shrinking Fed balance sheet, high inflation and pre-GFC like interest rates, equity markets rallied to near record highs. Much of this exuberance was built on market expectations of aggressive rate cuts in 2024. Companies with long duration earnings profiles benefited most from this, with the “magnificent seven” (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) almost singlehandedly driving all of the returns of the S&P500.
In this quarter’s insights, we look back on the year that was, and outline some of the opportunities and challenges ahead in 2024, including our eight predictions (i.e. guesses) for the year.
Josh Derrington, CIO, concludes this edition by sharing why so few investment managers build a successful and consistent track record of shorting the market.
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