As 2023 draws to a close, it is a good chance to reflect on the pivotal moments that shaped the markets this year. The past 12 months saw a complex interplay of events, from remarkable surges and newly set records to milestones that reverberated across financial markets around the world.
With interest-rate rises impacting most economies, exciting advancements in technology – particularly AI – transforming industries, crypto’s evolution challenging traditional finance, and the flux in materials and commodities markets, 2023 was a year teeming with noteworthy events that have left a lasting impression on investors and economies alike.
Australian and global economies
In the first months of 2023, Australians were grappling with soaring inflation that hit a staggering 7.4%, sparking major concerns for the year to come. At the same time, the Australian dollar was soaring off the back of economic strength in the early months.
In February, there were escalating fears of a potential recession in most parts of the Western world as central banks aggressively raised interest rates. However, the US Federal Reserve slowed its pace shortly after, reducing interest rate rises from 0.50% per meeting to 0.25% in an attempt to manage the turbulence.
By March, times were getting more difficult. The collapse of Silicon Valley Bank on 10 March and UBS’s acquisition of Credit Suisse just nine days later sent ripples through financial markets. The ASX200 saw its seventh consecutive week of decline, marking its worst run in over a decade. But despite this volatility, March also saw eToro make 196 ASX stocks available.
The Reserve Bank of Australia (RBA) paused rates for the first time in 11 months in April. Simultaneously, the Bank of Japan saw a major leadership overhaul, with Kazuo Ueda succeeding the long-standing Haruhiko Kuroda.
The mid-year saw several shifts in leadership roles and notable financial developments. Qantas CEO Alan Joyce announced his departure after 15 years, while the Federal Reserve and US Congress enacted crucial interest rate ‘pauses’ and debt ceiling deals, respectively.
Deflationary woes gripped China in August and sent ripples through the ASX200, with the index falling by 1.42% for the month of August. Fitch’s downgrade of the US AAA rating after a last-minute debt ceiling deal showed underlying economic tensions. The year’s third-quarter earnings season ended a nine-month S&P 500 profit ‘recession’.
Technology
In the tech sector, 2023 kicked off with a bang thanks to the meteoric rise of ChatGPT. Hailed as the fastest adoption of technology worldwide, the AI drew a whopping $14 billion investment from Microsoft in January.
February was the month where Meta’s turnaround began as the company capitalised on robot advertising revenues and showcased its promising outlook for 2023. The transformative potential of tech partnerships continued into April when eToro announced its collaboration with Twitter (now X) through the cashtag feature. However, Elon Musk’s other big-name company, Tesla, struggled with declining profit margins and tough cost cuts, resulting in a dip in profitability.
May saw Nvidia skyrocket by 26% off the back of a positive forecast beat driven by soaring demand for AI. This propelled Nvidia into the trillion-dollar market-cap club, at the same time coining the term ‘The Magnificent Seven’ for the leading big tech stocks that fuelled the US market’s performance throughout 2023.
Crypto
Bitcoin charged into 2023 with nine of the first 10 days closing in the green, setting the stage for a bullish run. By June, the crypto world hit a big milestone as the world’s largest asset manager, Blackrock, filed for a Bitcoin ETF. Many saw this as a critical step in institutional adoption and mainstream recognition of crypto.
The rally continued in October, with Bitcoin shattering the $35,000 barrier and hitting a year-to-date surge beyond 100%. This exceptional performance outstripped gains across all asset classes, adding plenty of optimism for a spot ETF launch. Bitcoin reached yet another year-to-date milestone in December, surpassing $42,000 and reaching a 20-month high – the highest since April 2022. Several altcoins, such as Cardano, also rode the bullish wave, surging in value by 39% over the first eight days of December
As the cryptocurrency world continues to evolve and prove itself against more traditional classes, these milestones backed up Bitcoin’s growing relevance as a formidable asset on the global financial stage.
Materials and commodities
The lithium market experienced a considerable downturn in April. Prices plummeted over 50% from their record peak in November 2022, and the decline impacted major players like Core Lithium, Pilbara Minerals and Liontown Resources. In May, Newcrest Mining accepted a takeover bid from NewmontMining. August saw a knock-on effect on BHP’s full-year results due to declining iron ore prices, resulting in a 37% dip in annual profits.
Oil faced its own challenges this year. By June, OPEC+ production cuts failed to stimulate demand and contributed to the ongoing drop in oil prices. However, the tides started to turn in September as Brent crude oil rose to its highest point of the year, exceeding $95 per barrel. The surge was driven in large part by prolonged OPEC supply cuts and the resilient performance of global economies. Oil’s rollercoaster of a year continued into October, November and December, steadily declining after four months of gains. By mid-December, crude oil WTI had dropped below $72 a barrel.
Record highs and lows
In June, Apple made history by soaring into the exclusive $3 trillion club, while August brought big news from Qantas as the airline announced record-breaking profits – a remarkable turnaround given how they started the year and ongoing issues with former CEO Joyce.
The US IPO markets also experienced a resurgence in the latter part of the year when, after 18 months of dormancy, they roared back to life in September. Companies like ARM, CART, KYVO and later BIRK all made headlines and proved that there is plenty of investor appetite for IPOs.
What a year it has been! We are expecting big things in 2024, so now is the time to start looking ahead and planning your New Year’s investing resolutions.
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