top of page

Market Commentary | The year that was

Before we embark on the journey of exploring what 2024 holds, let's take a moment to rewind the tape of financial narratives and delve into the riveting story that was 2023.

2023: A year that rewrote the script

Forget fortune cookies, 2023 was a year that shattered predictions. Resilience sprouted where cracks were expected, while stability crumbled under unexpected upheavals. Buckle up, for as we dissect this past year, the echoes of surprise still reverberate in our collective memory.

2023 also marked a turning point in our relationship with technology. The bizarre saga surrounding OpenAI's CEO highlighted the ethical complexities of artificial intelligence, while the cryptocurrency market's rollercoaster ride reminded us of the ever-evolving digital landscape.

In South Africa, the year was marked by both challenges and unexpected moments of joy and triumph.  While the nation weathered the worst electricity shortages in its history, South Africa's state-owned enterprises are facing increased scrutiny as dysfunction reaches a peak, with Transnet, operator of the country's major ports, at the heart of the storm. Durban harbour is experiencing unprecedented congestion, with a major backlog and a wait time exceeding four months. The current situation highlights the urgent need to address the broader issue of state-owned enterprises dysfunction before it damages the South African economy further. Amidst the challenges, 2023 also reserved moments of victory, where we witnessed South Africa's electrifying win in the Rugby World Cup.

Pivotal moments and key events of 2023:

  • China's disappointing reopening: A sluggish reopening, coupled with a shift to a more autocratic government and ongoing woes in its real estate sector, led to the country's first potential GDP decline since 1994. Investors were further disappointed by China's early policy responses, raising concerns about its future economic trajectory.

  • Rising interest rates: Central banks globally raised interest rates aggressively in 2023, led by the US Fed's fastest rate hike cycle in decades. This aggressive tightening aimed to combat soaring inflation, with a significant impact on mortgage rates and government bond yields.

  • Resilient global economy: Despite recession fears, global growth remained positive in 2023, albeit at a slower pace than previously expected. The most anticipated US recession did not materialize, with economic activity showing resilience and labour markets remaining strong. However, concerns persist about a potential global recession in 2024 due to rising interest rates and a slightly softening economy. The overall risk landscape remains tilted towards the downside.

  • US regional banking crisis: In March 2023, several midsized banks failed due to their susceptibility to the rapid rate hikes by the US Fed after an extended period of near-zero rates.

  • The Magnificent Seven: These stocks collectively rebounded from harsh declines in 2022. Notably, Nvidia led this remarkable group, and the gains propelled their combined weighting in the S&P 500 from 20% to 28%, the largest share for any seven companies since 1980. Astonishingly, the Magnificent Seven now have a higher weighting in the MSCI World Index than all of the stocks in the UK, China, France, and Japan. This exceptional performance is intricately linked to the promising prospects of advancements in generative AI.

* Source: Charlie Bilello

  • Energy shortages averted: Europe successfully managed its energy supplies despite the war in Ukraine and a decrease in Russian gas supplies. Europe's proactive strategy, including reduced energy consumption and diversification of sources, helped it weather the winter without major disruptions. While dependence on volatile liquefied natural gas remains a concern, Europe's gas storage levels are high, offering a buffer for the future.

  • Cryptocurrency recovery: The cryptocurrency market rebounded and nearly doubled after a major correction in 2022.

  • Gold as a safe haven: Central banks, led by the People’s Bank of China, increased their gold purchases to record levels, to diversify their foreign exchange reserves and hedge against inflation and geopolitical uncertainty.

  • Load Shedding tamed during winter: Despite the worst prolonged electricity shortages in 2023, South Africa managed to avoid major disruptions during winter, attributable to the accelerated installation of solar power, a decrease in breakdowns at power stations, fewer restricted supply of diesel and the return to operation of some of Eskom’s units.

  • Energy transition: The global energy revolution to cleaner energy sources already accelerated by the need to enhance energy security and climate concerns is expected to fast-track further, driven by geopolitical tensions the Middle East.

  • Climate crisis: The climate crisis continues to worsen, with extreme weather events becoming more frequent. 2023 was the hottest year recorded with a several extreme weather events globally, including heat waves, wildfires and floods. This puts global supply chains under additional pressure, triggering commodity prices to increase and exacerbating food security.


As we step into 2024, the legacy of 2023 lingers. It was a year that forced us to confront the fragility and resilience of our world, reminding us that the unexpected is always lurking around the corner. Let us delve deeper into these defining moments, unpack their complexities, and chart a course for a future shaped by the lessons learned in this year of tectonic shifts.

67 views0 comments

Recent Posts

See All
bottom of page