US indices move in the last weeks of the current stock market year towards or to close their 52-week highs! Much of the negative news from 2023 has been factored into the market and, looking at their development within the last weeks, it seems as if the US stock exchanges have largely been able to shake off the burdens of this year. These uncertainties included the war between Russia and Ukraine, the conflict in the Middle East, high inflation, and worries about interest rates, which had occupied the stock market for a longer period and instilled fear among investors. However, all these uncertainties seem to have been digested by the market – at least to a large extent.

The strong decline in inflation is currently providing good mood. The broad S&P 500 index has recently been able to increase significantly with a view to the USA, with four consecutive weeks. The tech-heavy Nasdaq 100 index recently marked a new yearly high with around 16,000 points, after it had come back to around 14,000 points by the end of October 2023 and had started the stock market year with less than 11,000 points.

2023 saw a strong recovery rally for the Nasdaq 100 on the stock market. The German leading index is also doing well. The distance to the all-time high is now limited to a few points. A new record high within the next few days is therefore very likely.

The fact that even the German stock market, especially the DAX, is currently doing so well is simply due to the fact that German stocks are much cheaper than US stocks in terms of valuation and most companies are also internationally positioned, especially with regard to production sites.

There are several reasons for the strong finish on the markets. One of them that fuels the year-end rally is the so-called window dressing. For your reminder: What is to be understood as „decorating the window“ means that professional investors (fund managers, insurance companies, pension funds and other institutional investors) spruce up their portfolios at the end of the year. Practically a cosmetic treatment of their balance sheet – and legally.

The efforts then lie on stocking the portfolios with the stocks that have done particularly well this year. On the other hand, one separates from the biggest losers of the year.

In summary, the year-end rally this year was reliable. I hope you have followed my advice and got yourself in position in time. The recent strength in the markets also speaks for a good start to the new year 2024…

But 2023 is not over yet and I remain very, very confident for the rest of the year – you should too. Don’t let go of quality stocks.