Market Overview
December was yet again another eventful month for the financial markets.
Throughout December the SPY posted a return of +4.4% and the YTD is +24.3%. The Nasdaq Composite performed +5.5% (YTD of +54.8%), its best performance since 2020.
Easing inflation, a resilient economy and the prospect of lower interest rates buoyed investors, particularly in the last two months of the year. The year ended on a nine-week run of gains, up 15.85% (last seen in January 1994, up 10.26%). As for the Magnificent Seven, they did great this year (with an average total return gain of 104.7%), accounting for 62.2% of the S&P 500’s 26.29% total return (excluding this group, the index return was 9.94% for 2023).
It needs to be pointed out that the SPY was 0.6% shy of an all time high set up in January 2022. These 2023 blockbuster returns erased the losses of the 2022 performance. Bond market investors appeared headed for a third losing year in a row until things turned around starting in late October. Excitement about potential cuts to interest rates sent bond prices soaring and yields dropping. The yield on the 10-year Treasury, which hit 5% in October, stood at 3.9%.
January 2024 will be active, as the U.S. Congress returns and has to address issues on Ukraine, Israel and the U.S. border, while a potential government shutdown looms if a new budget (or stopgap bill) is not reached by Jan. 19, 2024. Adding to the market’s activities is earnings season, starting on Friday, Jan. 12, 2024, with the big banks.
Teks Alpha Performance (%)
JAN | FEB | MAR | APR | MAY | JUN | JUL | AUG | SEP | OCT | NOV | DEC | YTD | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2021 | — | — | 1.36 | 0.79 | 0.77 | 0.80 | 1.51 | 1.61 | 1.15 | 2.56 | 1.70 | 0.05 | 12.9 |
2022 | -0.65 | 1.22 | 1.22 | -0.10 | -1.85 | -5.7 | 2.35 | -1.61 | -0.5 | 0.33 | -3.1 | -0.7 | -9.0 |
2023 | 3.5 | 0.45 | 1.45 | 2.20 | 5.20 | -1.50 | 0.2 | 1.10 | -1.50 | -0.3 | 0.6 | 0.35 | 12.0 |
Teks Alpha Performance vs Benchmarks since inception (March 2021)
TEKS ALPHA | SPY | HFRI | |
---|---|---|---|
Effective | 15.08% | 26.66% | 8.84% |
Annualized | 5.54% | 9.79% | 3.25% |
STD Dev | 6.69% | 17.90% | 6.31% |
Shape Ratio | 0.38 | 0.38 | 0.04 |