The highs (and lows) of the year in markets: The wild 2023 that was

A monitor displays a news conference with Federal Reserve chairman Jerome Powell as traders work on the floor at the New York Stock Exchange in New York, Wednesday, June 14, 2023. The Federal Reserve kept its key interest rate unchanged after having raised it 10 straight times to combat high inflation. But in a surprise move, the Fed signaled that it may raise rates twice more this year, beginning as soon as next month.

A monitor displays a news conference with Federal Reserve chairman Jerome Powell as traders work on the floor at the New York Stock Exchange.Seth Wenig/AP

A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.New YorkCNN — 

We’ve made it to the final Before the Bell of 2023 and what a difference these last 12 months have made.

I wrote during the first week of trading in 2023: “We’re in the salad days of the New Year — that period where many feel refreshed and motivated and perhaps even optimistic about the year to come. There’s a certain clarity that comes during this time in January.”

“That said, the big question weighing on everyone’s mind is whether or not the United States will enter a recession this year.”

Well, reader, it didn’t.

Inflation has eased, the Federal Reserve has indicated that a pivot towards rate cuts is imminent, economic data remains strong and the labor market is resilient. Stocks, meanwhile, have reached record highs.

At this point in 2022, US equities, represented by the S&P 500, had lost about 18%, and inflation was running at about 6.5%.

The Federal Reserve bank would “stay the course” and keep hiking rates until the job was done, warned Fed Chair Jerome Powell in his final meeting of last year.

Since then, inflation has more than halved to 3.1% (as of November) and the Fed has kept interest rates stable over its last three meetings. Policymakers are predicting three rate cuts next year and stocks have responded — the S&P 500 is up 23% in 2023.

That’s not to say it was all smooth sailing.

Let’s take a look back at some of the events that shot stocks higher and sent them crashing down this year.

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January 19: The US hits its $31.4 trillion debt ceiling set by Congress, forcing the Treasury Department to start taking extraordinary measures to keep the government paying its bills. Markets plunge lower but make a quick recovery.

Early March: Silicon Valley Bank and Signature Bank collapse after a stunning 48 hours in which bank runs and a capital crisis led to the second- and third-largest failures of a financial institution in US history. US banks post their worst performance since 2020 and a regional banking crisis ensues. UBS purchases Credit Suisse in the biggest banking rescue since 2008.

May 1: JPMorgan acquires First Republic bank, which became the second-largest bank failure in US history, pushing Silicon Valley Bank to third and Signature to fourth.

May 25: Nvidia releases a gangbusters earnings report, sending its stock soaring higher, triggering a frenzy about AI and putting the company on track to have the best market performance of the year.

Early June: Congress successfully suspends the nation’s debt limit through January 1, 2025, averting a first-ever US default just days ahead of the deadline. Markets barely react.

June 8: The S&P 500 rallies to end the day in a bull market, marking a 20% surge since its most recent low, reached on October 12, 2022. That brings to end the bear market that began in January 2022.

June 14: The Federal Reserve puts a pause on its historic rate-hiking campaign to fight inflation after raising rates 10 times in a row. Markets explode higher.

August 2: Fitch Ratings downgrades its US debt rating from the highest AAA rating to AA+, citing “a steady deterioration in standards of governance.” US markets sell off on the news: The Nasdaq has its worst day in five months.

September 14: After a nearly two-year drought in the IPO market, UK-based chip designer Arm makes a successful Nasdaq debut, with the largest IPO of the year. Arm finishes the day 25% higher.

October 7: Hamas attacks Israel, triggering a conflict that continues to rage.

October 19: The yield on the benchmark US 10-year Treasury note hits 5% for the first time since 2007 as strong economic growth and elevated inflation push yields higher.

December 13: The Federal Reserve holds interest rates steady for their third meeting straight and indicates three rate cuts are expected next year. Markets rally.

December 20: The Dow reaches its fifth record high in a row and the S&P 500 is just points away from breaking its January 2022 record.

Thank you so much for joining Before the Bell through all of this.

We’ll be back again in January to do it again next year. See you then.

Mortgage rates in America dropped to their lowest level since June

US mortgage rates continued to plunge this week — good news for homebuyers who have been facing the least affordable housing market since the 1980s, reports my colleague Anna Bahney.

After dropping under 7% last week for the first time since mid-August, rates fell again this week. The 30-year fixed-rate mortgage rate fell to an average of 6.67% in the week ending December 21, down from 6.95% the previous week, according to data from Freddie Mac released Thursday. A year ago, the average 30-year fixed-rate was 6.27%.

It was the eighth-straight week of declines, dragged lower by the anticipation of Federal Reserve rate cuts beginning next year.

Hermès billionaire wants to bequeath fortune to his former gardener

A descendant of Europe’s richest family has reportedly begun a process to adopt his middle-aged former gardener, planning to leave him at least half of his roughly €12 billion ($13 billion) fortune, reports my colleague Hanna Ziady.

Nicolas Puech, 80, a fifth-generation descendant of the founder of French luxury goods company Hermès, wants to cancel a contract that would bequeath his fortune to the Isocrates Foundation, which he founded, and instead make his employee a legal heir.

The charitable foundation is contesting Puech’s plan to cut ties, which it says it learned of only recently. “From a legal point of view, a unilateral cancellation of the contract of inheritance seems void and unfounded,” the organization said in a statement shared with CNN Wednesday.

“The foundation has therefore opposed the cancellation of the contract, while leaving the door open for discussions with its founder.”

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