How have the financial markets performed?
Equities After a couple of bad months, stock markets showed an exceptionally strong recovery in November. This festive mood continued into December. The turn in sentiment seems mainly due to market participants' expectations that central banks will cut base rates in 2024. American equities performed the best with a return of over 22% measured in euros. European equities finished in second place – with a return of almost 16% – despite the ongoing war in Ukraine and weak economic growth last year. Emerging markets lagged a bit behind with a return of ‘only’ 6%.
Bonds Inflation fell faster than expected and with expectations of falling interest rates, bonds also performed relatively well in 2023. Corporate bond yields were over 8% and government bond yields ranged between 7% to 8%, depending on maturity.