In the years to come, November 2023 will be remembered as one of the best months in the history of financial markets. The 76 basis point decline in the 10-year U.S. Treasury bond rate boosted equity and fixed income markets in tandem.

With respect to the stock market, the 8.92% return of the S&P 500 during the month places it in the 18th place of best months for this index since 1950. Likewise, the 18.97% accumulated during the year leaves us close to reaching the highs seen during December 2021, having recovered practically all that was lost during 2022. The Mexican IPC was no exception, as after briefly falling into negative territory during the month of October, it accumulated a monthly performance of 10.19% and 11.55% for the year.

Debt markets also had a historic November, with the aggregate bond index returning 4.53% outright, its best month since May 1985. Similarly, the investment grade corporate bond and high yield bond indices increased 5.98% and 4.53%, respectively.

Perhaps the exception of the month was oil, which accumulated a 6.25% decline during the period. However, this decline was not entirely negative, as it acted as a catalyst for the rest of the markets by reducing fears about the trajectory of inflation.

The latter has eased favorably to 3.2% year-over-year in its latest reading. Likewise, the U.S. economy's labor market appears to be losing steam and wages are moderating. Expected growth for the latest quarter has also fallen to 1% quarter-over-quarter annualized levels. And while the U.S. economy has begun to lose steam, it is still far from being in recession. The Fed has so far achieved the soft landing it wanted. If this continues, good times are ahead for the markets during 2024.

We at Grupo Inversión wish you a very Merry Christmas and all the best for the New Year.