January 16th, 2024

Your November and December 2023 market update

Last time, we reported that in September and October 2023, global indices posted downturns across the board.

Now, in a long-awaited changing of the tide, by the end of December 2023 those same indices had all seen positive returns.

In what JP Morgan calls a “Christmas present for investors”, the below table shows how global indices fared during Q4 2023 (31 December).

Source: JP Morgan

You could be wondering: what changed between October and December, and how did this influence markets?

Keep reading to find out the details from the UK, US, Europe, and Asia, plus how to capitalise on these upticks.


As 2023 came to an end, inflation continued to slow. In the year to December 2023, according to the Office for National Statistics (ONS), UK inflation slowed to 4%, up from 3.9% in November, but down from 4.6% in October. After inflation reached a peak of 11.1% in October 2022, this slowdown is welcome news for consumers and investors.

In response, the Bank of England (BoE) chose not to hike the base interest rate between August and December 2023, fixing it instead at 5.25%. Whilst this is still considered a restrictive rate, meaning that it could have an impact on individuals’ cost of living, investors may have been reassured that the BoE did not continue to raise the base rate as it had done since December 2021.

This more positive fiscal outlook sparked positive sentiment among consumers and investors towards the end of the year.

Despite these positives, the UK FTSE All-Share index posted just 3.2% at the end of December – and while this is an improvement since October, progress is slow. Top-performing sectors included technology and real estate, while the energy and healthcare sectors performed less favourably in November and December.

As the cost of living crisis shows signs of easing, investor confidence is creeping back in, but has understandably been dampened by the volatility seen in the past three years.


Posting the highest returns out of the above six global market indices, the US S&P 500 saw gains of 11.7% in the last quarter of 2023.

Once again, this may have much to do with inflation and interest rates. According to Reuters, US inflation grew much more slowly than in previous months, falling below 3% in November 2023.

What’s more, according to JP Morgan, the December Federal Open Market Committee meeting produced a forecast of three interest rate cuts from the Federal Reserve (Fed) across 2024, boosting morale even further among investors.

This being said, as our discretionary fund manager (DFM) Brooks Macdonald reported in December, Fed officials have warned that talks of interest rate cuts in March felt “premature”, meaning that reductions could be put on hold until later in 2024.

Crucially, fixed income holdings picked up across the board in November and December – not just in the US but around the world. After a long period of significant downturn for bonds, Q4 saw the tide turn, contributing to the strong progress of the US S&P 500. With stocks and bonds rising together, US markets have a positive outlook for 2024.

However, it is important to note that a US election at the end of the year could send short-term shockwaves through markets – no matter which way the pendulum swings. Nevertheless, volatility soon dwindles after political events, so it is important to stay calm if you are concerned about your US holdings.


According to eurostat, Eurozone inflation reached just 2.4% in November 2023, before rising incrementally to 2.9% in December.

As with the US and UK, this slowing of inflation has improved investing conditions across the board – just one of several factors that contributed to the 6.7% gains made by the MSCI Europe ex-UK index. Similarly, a pause in the continued hike of central interest rates by the European Central Bank (ECB) has offered some respite to consumers and investors alike.

This said, the energy sector “underperformed”, Schroders reports, largely due to waning energy prices and decreasing demand.

Of course, Russia’s continued invasion of Ukraine means that European holdings could remain somewhat volatile in 2024 – but there is no crystal ball that tells us exactly what will happen this year. Ensuring you have a diversified portfolio can help to cushion any downswings that occur later.


Chinese equities fell in Q4 2023, largely due to concerns around a lack of economic growth in the country. Nevertheless, the surrounding countries (excluding Japan) bolstered the MSCI Asia ex-Japan index, leading it to rise by 6.5% by the end of December.

Equities also lagged in Japan, leading to only a 2% return from the Japan TOPIX, although the index still posted an overall return of 28.3% in 2023 thanks to a boom in the technology sector.

Now is the time to seek advice if you wish to expand your investment portfolio

While taking advice during a downswing is crucial, many people are reluctant to seek investment support when things are going well. However, it could be prudent to speak with a financial planner in light of the market upswings we witnessed at the end of 2023.

A financial planner can help you to:

  • Capitalise on positive investment conditions
  • Remain calm and invest using data, rather than becoming overexcited by positive returns
  • Diversify your assets to prepare for any further volatility
  • Manage your portfolio in light of events beyond your control that could affect markets, like political elections.

To find out more about anything you have read here, or to speak to a financial planner, email enquiries@prosserknowles.co.uk or request a callback from one of our advisers.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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