Fourth Quarter 2013 Market Overview

Fourth Quarter 2013 Market Overview

The Equity Markets

2013 was a very strong year for the US Equity Markets and the outsized returns came as a surprise to even the most seasoned investment pundits. The US broad market had advanced 16.44% during 2012. Going into 2013, market consensus was for a tempered 8% gain, most citing GDP drag as a result of sequestration, government shutdown and tax increases. However the US economy muddled through and the US broad market surprised wildly to the upside delivering final quarter returns of over 10%.

The DJIA which has advanced for its fifth straight year had its biggest yearly gain since 1995 and returned 26.50% and the S&P 500 advanced 29.57% logging its best year since 1997. Not to be outdone, the Russell 2000 returned 37.03% in 2013, its biggest rally since 2003. Sector leaders included consumer discretionary and health care.
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2013: The Year in Review

2013: The Year in Review

As published in the Winter 2014 Edition of NJ Lifestyle


  1. Top Business Story for 2013:
    Great Year in the Stock Market. All of the major U.S. Stock Indices finished with gains above 26%. The markets logged the best year since 1996 and volatility disappeared as the largest decline of the year was only 5% in the period May 21st to June 24th.
  2. Washington Gridlock: Congress did their best to derail the economy and the bull market. Lawmakers began the year by ending the social security tax holiday, which shrank all U.S. paychecks. Then, at the end of the first quarter, with Congress unable to reach an agreement on a budget, the across the board sequester cuts went into effect. In October, Congress was unable to pass a 2014 budget and the Federal Government was partially shut down for sixteen days. Congress finally got its act together and passed a two-year budget deal. Although this was not any grand bargain that so many were hoping for (as the two year budget does nothing in regards to entitlement or tax reform), it did give the markets and the economy some certainty from Washington.

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