Financial Markets Defy Expectations in 2023 with Reversals in Interest Rates, Stock Gains Despite High Valuations
• Rates went higher than expected, with 10-year Treasuries breaching 5% in October, before unexpectedly reversing course sharply in December as inflation data sparked hopes central bankers could ease up.
• Other usually rate-sensitive markets like stocks, housing, gold, and even bitcoin shrugged off the interest rate ructions and performed strongly.
• America's stockmarket recovered nearly all its 2022 losses, defying high valuations amid a mania for AI and tech giants expected to benefit.
• The IPO market remained moribund despite falling volatility, better economic outlooks, and exuberant public equity investors, puzzling bankers.
• After failed forecasts and overturned assumptions in 2023, financial markets still managed to surprise, wrong-footing investors and analysts.