Hello, my name is Chad Taylor, managing partner with MVT Financial Advisors here in Houston, Texas. Today is February the first, 2024, and I had a few charts that I wanted to go over today and give you some information about where we think we are and where we think we're going. I know we had the market outlook for the office a few weeks ago, and so some of this is just repeating what we talked about then, but I always think it's good to see where we are right now based on our friends at the Wells Fargo Investment Institute, which is where we're getting this information. So I hope it's kind of amazing to me. We're already one month into the new year, and I know we've sent out a few pieces of information lately, and thank you for everyone that sent nice notes back to us.

Or actually, someone sent some bund cakes to us, which was very nice because we had had our 15 year anniversary here in January. It's amazing how fast 15 years goes by since we started MDT Financial Advisors. And then we mentioned the adding to the Forbes top teams list for the state of Texas, which we were very excited about. So I know if you haven't seen those emails and you have questions about that, let me know and I can resend it to you. But I had a few things to go over today. Three charts from our, like I said, our friends at the Wells Fargo Investment Institute. So let me share my screen with you.

Okay, so this first chart is titled Where Are We Today? So if you see up here in the top left hand corner, the US Stock Market rallied in 2023. You can see this chart goes all the way back to 2013, and this is the s and p 500, if you remember the 500 companies versus the Dow Jones, which is in the thirties range in the nasdaq, which has a lot more technology type companies. But this was the Dow Jones in rally last year. I'm going to cover something in a second kind of reminding you about the narrowness of that rally, but it was kind of a strange year after 2022 being a strange year where most of the return came in the fourth quarter, really November and December. But we did have a positive year in the stock market, which was nice. Over here to the right hand side, oil prices have softened a little bit. You can see this chart art, we're probably still in that supercycle, commodity supercycle, but those things last for years and it doesn't necessarily mean always straight up, but we do think it's going to be trending up over time if we are in that super cycle. But it did pull back slightly in 2023 down here to the left. The US dollar headed higher.

It did fall in 2022, but we do think it's still heading higher, which has ramifications on international equities as well as commodities and things. But you can see from where it was back in 2014 we're quite a bit higher. And then the biggest culprit of all the stuff going on in 2022 and in 2023 inflation, I thought this little part of the chart was interesting. Inflation moving towards the fed's target. So from 2013, you can see inflation, which is slightly above 2%. Their target range or average, excuse me, kind of bounced around here at that 2% target that they always talk about. And then here, starting in 2021, it started climbing, which then made the fed pivot and start raising interest rates to try to offset some of that, which it looks like they've done a pretty good job of doing that. So inflation's getting back down to the average.

We had a little hiccup there in the fall, but there again, it's pulled back again, but inflation's moving that direction. I wouldn't say that it's there yet. Yesterday the Chairman Powell came out and they didn't raise interest rates again. I think that was the fourth time that they haven't raised interest rates. The markets sold off mainly because Chairman Powell didn't say that they were going to lower him the next meeting, which I think the market was kind of pricing a little bit at that end there. It doesn't mean they won't, but he didn't give a real clear idea that that was going to happen. So the market sold off today. It's been a little volatile, but it's up a little bit at this point at least. But those are things that we're really watching right now. Okay, so where are we headed?

We still expect inflation to slow, and like I mentioned, they haven't, they've stopped raising interest rates right now because inflation is heading towards their target. We are still expecting the GDP growth to slow a little bit this year. We've talked about that in our, I know I've spoken to everyone or quite a few people about it. We're saying still probably it didn't hurt to be cautious here. Wage growth is accelerating still because unemployment, unemployment has been low. We're expecting it to rise a little bit this year, but still, historically it's low right now. Consumer confidence, we're expecting it to fall a little bit over, worries about the budget and recession if there is one, and then the finances because of all of that. So consumer confidence is a real big deal when it comes to our economy. And then finally, the volatility because of all of this, if the GDP, if the economy does slow and fall, if unemployment does rise, if people, the consumers are a little less confident than they were, you're going to see more volatility in the markets, which is what you kind of worry about after two years of what we've gone through.

That fourth quarter of 2023 was nice, November was nice, December was nice. Those helped make the year positive, but there's still things to be concerned about at this point. And then finally, when we talked about the US stock market rallied last year, I know we've mentioned this a number of times, but this chart really kind of showed what we were talking about. The s and p 500 is 500 stocks, but last year's performance, if you can see, 62% of the performance was because of seven stocks. The magnificent seven as they're called. I know we've gone through those before, but they really only make up about 28% of the index. But they accounted for 62% of the gain in the index. The remaining 493 stocks, which make up 72% of the index accounted for 38% of the return. So it was very narrow last year, which was kind of different. It did start to flatten out a little bit in the fourth quarter because that number was, the 62% number was higher earlier in the year, but that's still a little different from most years in the market. Okay, so quickly, that's just what I had. If you have any questions about this, please let me know. If you have any questions about anything as far as your financial world goes, please let me know. We always love to hear from you, and I hope you have a great day. Thank you.

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