5 Pieces of Good News for Investors as 2023 Wraps Up
Dec 22, 2023
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Topics discussed in the podcast include the Federal Reserve signaling an end to hiking interest rates, the bond market's performance, the AI boom and the success of chip makers, the performance of the 'magnificent seven' stocks, and the competition among obesity drug makers. Other topics include the positive performance of bonds in 2023 and factors to consider in 2024 for investors.
The Fed signaling potential rate cuts next year is good news for investors, but fighting inflation, especially housing costs, remains a challenge for them.
AI technology is not limited to chip makers like Nvidia; software companies and those integrating AI into their products are crucial players in this space, reflecting the widespread adoption of AI across industries.
Deep dives
Market Trends and Expectations for Next Year
The markets reacted positively to the Fed's decision to keep interest rates unchanged and signal potential rate cuts next year. This change in stance suggests a shift towards a lower rate environment and provides good news for investors. However, the fight against inflation, especially regarding housing costs, remains a challenge for the Fed. Despite this, the market rally has broadened recently, with mid-cap and small-cap stocks performing well.
The Role of Chip Makers in the AI Boom
Nvidia continues to be a leader in the chip market for AI technology. However, there is a broader ecosystem of companies involved in this space. Besides chip makers like Nvidia, software companies like Microsoft and companies integrating AI into their products, such as Salesforce, are also important players. The widespread adoption of AI in various industries makes it an integral part of business plans for many companies.
The Competition in Obesity Drug Market
Eli Lilly and Novo Nordisk have been leading the way in the obesity drug market. However, the valuations of these companies are quite expensive. Morningstar suggests looking at other attractively priced options like Roche, which recently made a significant investment in this space. The obesity drug market is expected to become increasingly competitive, making it important for investors to explore alternative investment opportunities.
Tom Lauricella, Morningstar Inc’s global markets editor and Smart Investor newsletter editor, discusses some of this year’s biggest headlines including the Federal Reserve signaling an end to hiking interest rates, the bond market’s performance, and the AI boom.