Markets in 2023: Soaring stocks and roaring bonds defy the doubters
By Marc Jones
LONDON (Reuters) -This year might go down as one of the most unusual ever in financial markets — mainly because everything seems to have come good despite a lot of turbulence and many predictions turning out to be wrong.
Take equity markets. World stocks are nearly 20% higher despite the highest interest rates in decades and a mini crisis that wiped out one of Europe's best known banks — Credit Suisse — along with a few smaller ones in the U.S.
In the bond markets, just a few months ago investors were expecting the Fed & Co to raise rates and leave them there while recessions rolled in. Now bond markets are looking to central banks to embark on a rate-cutting spree with inflation apparently beaten.
Other areas of the markets have experienced wild gyrations that are hard to explain. Bitcoin is up 150% on the year. Some of the most beaten up emerging market bonds have achieved triple-digit gains. The «magnificent seven» tech giants have seen a 99% surge in their shares over the year.
«If you'd told me at the start of year that we would have a U.S. regional banking crisis and Credit Suisse would cease to exist, then I'm not sure we would have guessed that we would see the year we've had for risk assets,» PIMCO's CIO for Global Fixed Income, Andrew Balls, said.
The result has been 3.5% — 6.5% returns from top government bonds and a $10 trillion rally in world stocks, although that has been top heavy.
Meta (NASDAQ:META) and Tesla (NASDAQ:TSLA) have soared 190% and 105%. The Nasdaq is on the cusp of its strongest year in two decades, while AI's demand for semiconductor chips has catapulted Nvidia (NASDAQ:NVDA) 240% higher into the $1 trillion dollar club.
But it has been a very bumpy ride.
In March, the collapse
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