Wed. Jun 19th, 2024

From the stunning surge of the ‘Magnificent 7’ stocks to bitcoin’s shock rebound, here are 8 of 2023’s wildest markets stories<!-- wp:html --><p>Silicon Valley Bank's collapse in March was one of the defining markets stories of 2023.</p> <p class="copyright">Getty Images</p> <p>It's been another eventful year for markets.<br /> Stocks defied Wall Street's gloomy predictions, bonds suffered a historic rout, and the US dodged a much-expected recession.<br /> Here are the eight markets stories that defined 2023.</p> <p>It's been another rollercoaster of a year for markets.</p> <p>Stocks enjoyed a spectacular rebound after a dismal 2022, bonds' three-year slump turned into a <a href="https://markets.businessinsider.com/news/bonds/treasury-bond-yields-market-selloff-market-crashes-dot-com-bubble-2023-10">historic rout</a>, and the US economy defied forecasters' gloomy predictions by dodging a recession.</p> <p>Meanwhile, ChatGPT became a household name, seven Big Tech companies racked up historic stock-market returns, and <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a> staged a mini-comeback with approval of a spot ETF looking increasingly likely.</p> <p>Here are eight markets stories that defined 2023.</p> <div> <div class="slide"> <div class="slide-title">1. The rise of AI</div> <div class="slide-image">OpenAI CEO Sam Altman. <p class="copyright">Tomohiro Ohsumi/Getty Images</p> </div> <div class="slide-content"> <p>ChatGPT had racked up over <a href="https://www.reuters.com/technology/chatgpt-sets-record-fastest-growing-user-base-analyst-note-2023-02-01/" target="_blank" rel="noopener">100 million users</a> by January 2023 – and the intelligent language tool's rapid rise in popularity quickly sparked an AI goldrush on Wall Street.</p> <p>Stocks like <a href="https://markets.businessinsider.com/stocks/msft-stock">Microsoft</a> and <a href="https://markets.businessinsider.com/stocks/nvda-stock">Nvidia</a> have emerged as the early winners from the year's hottest investing theme. Jensen Huang's chipmaker surged to a <a href="https://markets.businessinsider.com/news/stocks/nvidia-trillion-dollar-valuation-ai-jensen-huang-apple-amazon-microsoft-2023-5">trillion-dollar valuation</a> for the first time ever thanks to its dominance of the market for graphics processing units (GPUs), which are used to power large language models like OpenAI's bot.</p> <p>But the rise of AI has also led to worries about <a href="https://www.businessinsider.com/ai-biggest-fears-risk-threat-chatgpt-openai-google-2023-6">the risks the technology poses</a>. Gary Gensler, who heads up the US's top financial watchdog the Securities and Exchange Commission, has repeatedly warned about a potential cross-asset crash, and doubled down earlier this month when he said AI could eventually drive markets "<a href="https://markets.businessinsider.com/news/stocks/artificial-intelligence-risks-financial-markets-gensler-markets-cliff-banks-regulator-2023-12">off an inadvertent cliff</a>".</p> </div> </div> <div class="slide"> <div class="slide-title">2. SVB's bankruptcy</div> <div class="slide-image">Silicon Valley Bank collapsed in March after revealing billion-dollar losses on its bond portfolio. <p class="copyright">Getty Images</p> </div> <div class="slide-content"> <p>Little-known <a href="https://markets.businessinsider.com/news/stocks/svb-silicon-valley-bank-collapse-jpmorgan-morgan-stanley-bank-stocks-2023-3">Silicon Valley Bank</a> unexpectedly became the biggest story in markets in mid-March after it disclosed billion-dollar losses on its bond portfolio.</p> <p>News of the California lender's fixed-income firesale led to its stock price crashing nearly 90% in two days before it halted trading of its shares, while big-name clients like Peter Thiel's Founders Fund quickly pulled their money from the bank.</p> <p>That sparked huge turmoil in the US's regional banking sector, with San Francisco's <a href="https://markets.businessinsider.com/news/stocks/first-republic-bank-stock-price-failure-seizure-fdic-jpmorgan-takeover-2023-5">First Republic</a> collapsing weeks later. By the end of 2023, the <a href="https://markets.businessinsider.com/etfs/invesco-kbw-bank-etf-us46138e6288">KBW Bank Index</a> – which tracks the price of the US's leading publicly-traded financial institutions – had plunged nearly 20% from the level it had traded at before SVB failed.</p> </div> </div> <div class="slide"> <div class="slide-title">3. Credit Suisse's collapse</div> <div class="slide-image">Credit Suisse was taken over by its longtime rival UBS at the height of the banking crisis. <p class="copyright">Arnd Wiegmann/Getty Images</p> </div> <div class="slide-content"> <p>Those weren't the only banks to come a cropper in 2023. On the other side of the Atlantic, <a href="https://markets.businessinsider.com/news/stocks/ubs-credit-suisse-takeover-deal-winners-and-losers-stock-market-2023-3">Credit Suisse collapsed</a> amid March's SVB-fueled turmoil, with its stock price plunging 70% in the space of just five days.</p> <p>Switzerland's government eventually forced through a <a href="https://www.businessinsider.com/credit-suisse-ubs-offers-up-to-billion-rescue-deal-report-2023-3">historic 3 billion franc ($3.25 billion) deal</a> that saw the 167-year-old lender taken over by its longtime rival <a href="https://markets.businessinsider.com/news/ubs">UBS</a>, in one of the biggest falls from grace the banking world has seen since the 2008 financial crisis.</p> </div> </div> <div class="slide"> <div class="slide-title">4. The bond-market meltdown</div> <div class="slide-image">Longer-duration US Treasury bonds suffered a historic rout this year. <p class="copyright">Angela Weiss/Getty Images</p> </div> <div class="slide-content"> <p>The same asset class that led to SVB's demise hit headlines again in October, when bonds' post-pandemic skid spiraled into one of the worst collapses in market history. In a meltdown that <a href="https://markets.businessinsider.com/news/bonds/bonds-crash-stock-market-outlook-financial-crisis-dot-com-bubble-2023-10">rivaled the 2008 stock-market crash</a>, <a href="https://markets.businessinsider.com/rates/u-s--rates-10-years">10-year US Treasury notes</a> shed 46% of their value between March 2020 and the end of September, with <a href="https://markets.businessinsider.com/news/bonds/bond-market-crash-us-treasury-yields-federal-reserve-debt-crisis-2023-10">yields topping 5%</a> for the first time in 16 years.</p> <p>Investors' belief that the Federal Reserve might carry on hiking interest rates well into 2024 in a bid to kill off inflation sparked the sell-off. In the months since, comforting <a href="https://www.businessinsider.com/inflation-consumer-price-index-economic-outlook-food-gas-prices-october-2023-11">Consumer Price Index data</a> has given bonds some much-needed relief, with 10-year yields retreating around 75 basis points from their mid-October peak.</p> </div> </div> <div class="slide"> <div class="slide-title">5. Bitcoin's resurgence</div> <div class="slide-image">BlackRock CEO Larry Fink. <p class="copyright">Arnd Wiegmann/Reuters</p> </div> <div class="slide-content"> <p>The cryptocurrency world found itself at rock-bottom at the end of 2022, with <a href="https://fortune.com/2022/08/01/ftx-crypto-sam-bankman-fried-interview/" target="_blank" rel="noopener">onetime messiah</a> Sam Bankman-Fried's FTX empire spectacularly collapsing and <a href="https://markets.businessinsider.com/news/currencies/crypto-crash-bitcoin-bear-market-sam-bankman-fried-ftx-bankruptcy-2022-12">bitcoin trading at just $17,000</a>.</p> <p>Twelve months later, the large-cap token has enjoyed a stunning return to form. Its price is up an eye-popping 152% year-to-date, making it one of 2023's best-performing assets.</p> <p>Fueling bitcoin's rally has been ongoing speculation about the SEC approving of a <a href="https://markets.businessinsider.com/news/currencies/bitcoin-price-crypto-gains-etf-blackrock-ftx-sam-bankman-fried-2023-11">spot ETF</a> that would allow big institutional investors to buy cryptocurrencies for the first time. The token's highest-profile supporter has been the world's largest asset manager, BlackRock, with <a href="https://markets.businessinsider.com/news/currencies/bitcoin-price-crypto-investing-outlook-blackrock-spot-etf-larry-fink-2023-7">CEO Larry Fink</a> saying in July that regulators approving a bitcoin-tracking fund would help to "democratize crypto".</p> </div> </div> <div class="slide"> <div class="slide-title">6. Russia's economic resilience</div> <div class="slide-image">Russia's economy has held up in the face of western sanctions this year. <p class="copyright">Sergei Guneyev/Getty Images</p> </div> <div class="slide-content"> <p>The war in Ukraine has carried on dominating headlines this year, but Russia's economy has held firm as the battle in eastern Europe rages on.</p> <p>In November, Kremlin spokesperson Dmitry Peskov shrugged off the West's oil and gas embargoes and financial restrictions, saying Russia had "adapted" and was no longer <a href="https://www.businessinsider.com/russia-adapted-sanctions-not-scared-more-ukraine-war-kremlin-peskov-2023-10">"scared" of further measures</a>.</p> <p>For now, he's right that the Russian economy is holding steady, with the IMF recently <a href="https://www.businessinsider.com/russia-ukraine-war-vladimir-putin-economy-gdp-growth-inflation-imf-2023-10">upgrading its 2023 GDP growth forecast</a> to over 2% – although a <a href="https://markets.businessinsider.com/news/currencies/russian-economy-current-account-surplus-drops-85-war-ukraine-putin-2023-8">cratering current-account surplus</a> and <a href="https://markets.businessinsider.com/news/currencies/russia-economy-ruble-israel-hamas-war-dollar-dominance-currency-flight-2023-10">tanking ruble</a> remain causes of concern for policymakers in Moscow.</p> </div> </div> <div class="slide"> <div class="slide-title">7. No US recession</div> <div class="slide-image">The US economy has managed to avoid a much-expected recession this year. <p class="copyright">Alex Brandon/AP Photo</p> </div> <div class="slide-content"> <p>In one of 2023's most pleasantly surprising twists, the economic slump that much of Wall Street had predicted didn't come to pass.</p> <p>Most of the country's top banks were united in forecasting there'd be a recession before year-end, but a third-quarter GDP surge has helped the economy to avoid that fate. Resilient consumer spending – which has had a helping hand from the smash-hit <a href="https://www.businessinsider.com/taylor-swift-barbie-oppenheimer-beyonce-economy-gdp-growth-jobs-report-2023-10">Taylor Swift and Beyoncé</a> tours – has helped to prop up growth.</p> <p>Meanwhile, <a href="https://www.businessinsider.com/unemployment-rate-job-growth-november-labor-market-2023-12">unemployment</a> is still hovering below 4% and <a href="https://www.businessinsider.com/inflation-consumer-price-index-economic-outlook-food-gas-prices-october-2023-11">inflation</a> has rapidly cooled, in a sign <a href="https://www.businessinsider.com/dream-economic-scenario-inflation-job-market-unemployment-growth-federal-reserve-2023-11">the Fed's dream "soft landing" scenario</a> is still within reach as the central bank prepares to call time on its rate-hiking campaign.</p> </div> </div> <div class="slide"> <div class="slide-title">8. Stellar gains for the "Magnificent Seven"</div> <div class="slide-image">Nvidia CEO Jensen Huang. <p class="copyright">I-Hwa Cheng/AFP via Getty Images</p> </div> <div class="slide-content"> <p>Last but not least, it's been a banner year for seven Big Tech stocks – <a href="https://markets.businessinsider.com/stocks/aapl-stock">Apple</a>, Microsoft, Google owner <a href="https://markets.businessinsider.com/stocks/googl-stock">Alphabet</a>, <a href="https://markets.businessinsider.com/stocks/amzn-stock">Amazon</a>, Nvidia, Facebook parent <a href="https://markets.businessinsider.com/stocks/meta-stock">Meta Platforms</a>, and Elon Musk's EV maker Tesla.</p> <p>The so-called <a href="https://markets.businessinsider.com/news/stocks/tech-stocks-tesla-nvidia-apple-microsoft-amazon-the-magnificent-seven-2023-6">"Magnificent Seven" group</a> have racked up trillions of dollars worth of gains in 2023, powered higher by both the rise of AI and investors seeking out safer investments. <a href="https://markets.businessinsider.com/news/stocks/stock-market-surge-top-us-billionaires-wealth-gains-tesla-meta-2023-12">It's been a great year for their billionaire founders, too</a>.</p> <p>Having a narrow group of companies dominate the <a href="https://markets.businessinsider.com/index/s&p_500">S&P 500</a> might not be good news for <a href="https://markets.businessinsider.com/news/stocks/big-tech-stocks-apple-microsoft-alphabet-amazon-nvidia-meta-charts-2023-5">the market's general health</a> – but the benchmark index will likely have to rely on the blue-chip group once again next year if its to meet <a href="https://www.businessinsider.com/stock-market-outlook-all-time-high-sp-500-deutsche-bank-2023-11">Wall Street's goals of fresh record highs</a>.</p> </div> </div> </div> <div class="read-original">Read the original article on <a href="https://www.businessinsider.com/craziest-stories-bitcoin-russia-magnificent-seven-recession-bond-market-crash-2023-12">Business Insider</a></div><!-- /wp:html -->

Silicon Valley Bank’s collapse in March was one of the defining markets stories of 2023.

It’s been another eventful year for markets.
Stocks defied Wall Street’s gloomy predictions, bonds suffered a historic rout, and the US dodged a much-expected recession.
Here are the eight markets stories that defined 2023.

It’s been another rollercoaster of a year for markets.

Stocks enjoyed a spectacular rebound after a dismal 2022, bonds’ three-year slump turned into a historic rout, and the US economy defied forecasters’ gloomy predictions by dodging a recession.

Meanwhile, ChatGPT became a household name, seven Big Tech companies racked up historic stock-market returns, and bitcoin staged a mini-comeback with approval of a spot ETF looking increasingly likely.

Here are eight markets stories that defined 2023.

1. The rise of AI
OpenAI CEO Sam Altman.

ChatGPT had racked up over 100 million users by January 2023 – and the intelligent language tool’s rapid rise in popularity quickly sparked an AI goldrush on Wall Street.

Stocks like Microsoft and Nvidia have emerged as the early winners from the year’s hottest investing theme. Jensen Huang’s chipmaker surged to a trillion-dollar valuation for the first time ever thanks to its dominance of the market for graphics processing units (GPUs), which are used to power large language models like OpenAI’s bot.

But the rise of AI has also led to worries about the risks the technology poses. Gary Gensler, who heads up the US’s top financial watchdog the Securities and Exchange Commission, has repeatedly warned about a potential cross-asset crash, and doubled down earlier this month when he said AI could eventually drive markets “off an inadvertent cliff“.

2. SVB’s bankruptcy
Silicon Valley Bank collapsed in March after revealing billion-dollar losses on its bond portfolio.

Little-known Silicon Valley Bank unexpectedly became the biggest story in markets in mid-March after it disclosed billion-dollar losses on its bond portfolio.

News of the California lender’s fixed-income firesale led to its stock price crashing nearly 90% in two days before it halted trading of its shares, while big-name clients like Peter Thiel’s Founders Fund quickly pulled their money from the bank.

That sparked huge turmoil in the US’s regional banking sector, with San Francisco’s First Republic collapsing weeks later. By the end of 2023, the KBW Bank Index – which tracks the price of the US’s leading publicly-traded financial institutions – had plunged nearly 20% from the level it had traded at before SVB failed.

3. Credit Suisse’s collapse
Credit Suisse was taken over by its longtime rival UBS at the height of the banking crisis.

Those weren’t the only banks to come a cropper in 2023. On the other side of the Atlantic, Credit Suisse collapsed amid March’s SVB-fueled turmoil, with its stock price plunging 70% in the space of just five days.

Switzerland’s government eventually forced through a historic 3 billion franc ($3.25 billion) deal that saw the 167-year-old lender taken over by its longtime rival UBS, in one of the biggest falls from grace the banking world has seen since the 2008 financial crisis.

4. The bond-market meltdown
Longer-duration US Treasury bonds suffered a historic rout this year.

The same asset class that led to SVB’s demise hit headlines again in October, when bonds’ post-pandemic skid spiraled into one of the worst collapses in market history. In a meltdown that rivaled the 2008 stock-market crash, 10-year US Treasury notes shed 46% of their value between March 2020 and the end of September, with yields topping 5% for the first time in 16 years.

Investors’ belief that the Federal Reserve might carry on hiking interest rates well into 2024 in a bid to kill off inflation sparked the sell-off. In the months since, comforting Consumer Price Index data has given bonds some much-needed relief, with 10-year yields retreating around 75 basis points from their mid-October peak.

5. Bitcoin’s resurgence
BlackRock CEO Larry Fink.

The cryptocurrency world found itself at rock-bottom at the end of 2022, with onetime messiah Sam Bankman-Fried’s FTX empire spectacularly collapsing and bitcoin trading at just $17,000.

Twelve months later, the large-cap token has enjoyed a stunning return to form. Its price is up an eye-popping 152% year-to-date, making it one of 2023’s best-performing assets.

Fueling bitcoin’s rally has been ongoing speculation about the SEC approving of a spot ETF that would allow big institutional investors to buy cryptocurrencies for the first time. The token’s highest-profile supporter has been the world’s largest asset manager, BlackRock, with CEO Larry Fink saying in July that regulators approving a bitcoin-tracking fund would help to “democratize crypto”.

6. Russia’s economic resilience
Russia’s economy has held up in the face of western sanctions this year.

The war in Ukraine has carried on dominating headlines this year, but Russia’s economy has held firm as the battle in eastern Europe rages on.

In November, Kremlin spokesperson Dmitry Peskov shrugged off the West’s oil and gas embargoes and financial restrictions, saying Russia had “adapted” and was no longer “scared” of further measures.

For now, he’s right that the Russian economy is holding steady, with the IMF recently upgrading its 2023 GDP growth forecast to over 2% – although a cratering current-account surplus and tanking ruble remain causes of concern for policymakers in Moscow.

7. No US recession
The US economy has managed to avoid a much-expected recession this year.

In one of 2023’s most pleasantly surprising twists, the economic slump that much of Wall Street had predicted didn’t come to pass.

Most of the country’s top banks were united in forecasting there’d be a recession before year-end, but a third-quarter GDP surge has helped the economy to avoid that fate. Resilient consumer spending – which has had a helping hand from the smash-hit Taylor Swift and Beyoncé tours – has helped to prop up growth.

Meanwhile, unemployment is still hovering below 4% and inflation has rapidly cooled, in a sign the Fed’s dream “soft landing” scenario is still within reach as the central bank prepares to call time on its rate-hiking campaign.

8. Stellar gains for the “Magnificent Seven”
Nvidia CEO Jensen Huang.

Last but not least, it’s been a banner year for seven Big Tech stocks – Apple, Microsoft, Google owner Alphabet, Amazon, Nvidia, Facebook parent Meta Platforms, and Elon Musk’s EV maker Tesla.

The so-called “Magnificent Seven” group have racked up trillions of dollars worth of gains in 2023, powered higher by both the rise of AI and investors seeking out safer investments. It’s been a great year for their billionaire founders, too.

Having a narrow group of companies dominate the S&P 500 might not be good news for the market’s general health – but the benchmark index will likely have to rely on the blue-chip group once again next year if its to meet Wall Street’s goals of fresh record highs.

Read the original article on Business Insider

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