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Capital Ideas™ 
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World Markets Review
Markets rally on rate cut expectations: Q4 roundup
January 8, 2024

Global stocks rallied sharply in the fourth quarter and ended 2023 with double-digit gains, based on the MSCI All Country World Index. Declining inflation and signs that major central banks may be done raising interest rates powered stocks higher. Strength in the U.S. economy provided a further tailwind.


Information technology stocks led markets higher. In the fourth quarter, 10 of 11 sectors in the MSCI All Country World Index gained ground. Real estate stocks staged a strong recovery after being hammered by rising interest rates over the past year. Consumer staples stocks rose but lagged the overall market, and energy stocks declined modestly amid falling oil prices. 


Bond markets rose across the board in the fourth quarter and full year. Investors welcomed central bank decisions to pause their aggressive rate-hiking campaigns. As inflation moved lower, investors and economists started to anticipate rate cuts in mid-2024, further fueling the rally.


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World Markets Review
Emerging Markets
Global Equities
U.S. Equities
Europe
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Monetary Policy

MSCI indexes are free-float-adjusted, market-capitalization weighted indexes. Developed market index results reflect dividends net of withholding taxes. Emerging market index results reflect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. Each index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes. MSCI All Country World Index (ACWI) is designed to measure results of more than 40 developed and emerging equity markets.

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