Markets showed resilience in December, following a strong showing in November. Economic data released this month continues to show a mixed economy. The latest inflation readings came in lower, however core components, like shelter costs, remained unchanged. Retail sales data exceeded expectations, with restaurants and online retail leading the way. Finally, job growth increased, yet reports note this is partly due to the return of striking automotive and motion picture industry employees.
Fed’s Press Conference
The Federal Reserve’s press conference on December 13th raised more questions than intended. Throughout November and into December, members of the Fed repeatedly stated it was too early to discuss rate cuts (the assumed course after pausing rate hikes in July). However during the conference, Jerome Powell made it clear they believe interest rates have peaked, and to anticipate three cuts in 2024. The about-face is causing many analysts to speculate about the reasons for the Fed’s narrative change. Regardless, all eyes will continue to remain on the Fed into next year.
Looking Forward To 2024
From a financial markets perspective, inflation rates and Federal Reserve actions will remain key focus areas for investors. Markets are hoping to see inflation remain stable, and for the Fed to follow through with forecasted rate cuts. Housing prices, interest rates, and unemployment numbers will be broad economic measures that will gauge investor sentiment. In the technological sector, Artificial Intelligence‘s rapid advance in capabilities since its 2023 debut will likely have noticeable impacts next year. AI already boasts dramatic increases in productivity and scientific discoveries, yet as with all new technology, its externalities will be societal grappling points. Unfortunately timed with a highly contentious presidential election, it has become dramatically easy to create shockingly realistic ‘deep fake’ videos, which will not make the democratic process any easier. Also, Apple is expected to release its version of AI in the coming year, continuing its trend of delivering high-quality (yet not first-to-market) products.
2024 Social Security COLA
For those collecting Social Security, SSA has announced the 2024 COLA (Cost of Living Adjustment): 3.2%. This increase is intended to help retirees manage the rising costs of goods and services. This increase is dramatically less than the increase recipients received in 2023 (8.6%), reflecting the observed decrease in the annual inflation rate.
As a reminder, if you have a non-IRA account with Citrus Wealth, your tax documents will not be distributed until March 1st. Therefore, we highly recommend scheduling your tax appointment in March to ensure you have all the necessary documents. Raymond James delays these accounts’ tax documents because many investment companies delay getting their tax information to Raymond James. If you have any questions, please give our office a call!
We here at Citrus Wealth want to wish everyone a happy and safe holiday. We look forward to speaking with you next year!
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Any opinions are those of Citrus Wealth Management and not necessarily those of Raymond James. The information contained in this email does not purport to be a complete description of the securities, markets, or developments referred to in this material nor is it a recommendation. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results.