Major Events in the United States in 2023

Taking a look at major economic and financial events in the United States during 2023

RESEARCHYEAR IN REVIEW

Michael Kurek

1/5/20246 min read

Many different stocks increased drastically in value. Some also lost a lot of value. One company that makes it to the top spot of 2023 in terms of growth is the NVIDIA Corporation (NVDA). Their stock increased 238.15% from December 30th 2022 to December 27th 2023. A one hundred dollar investment on December 30th 2022 would be worth over $330 by December 27th 2023. The main reason for Nvidia’s insane increase in stock value over 2023 was their involvement in the AI space race, as some call it. Chat-GPT released at the end of November in 2022, making headlines days after releasing. But 2023 saw the most growth of the AI buzz. Many companies invested in either AI companies, or creating their own AI technology. Like Microsoft, Apple, and Google. Nvidia reaps the rewards from this and with their earnings beats and the increasing bullish outlook for the industry, Nvidia had a great year last year. What was 2023’s largest decliner you might ask? Well, that would be Icahn Enterprises. IEP lost a value of 66.44% from December 30th 2022 to December 27th 2023. The company's current market cap is 7.24 Billion dollars. With the average daily trading volume at 971.37k. The company's decrease is entirely based on Hindenburg Research's report of the company released on May 2nd. Saying that “Icahn Enterprises has been using inflated asset valuations and also pointed to a ponzi-like economic structure.” 2 The company's stock declined 40.32% from May 1st to May 4th of last year.

2023 was a crazy year for finance and investing in many different aspects especially in the United States. U.S. politics and international occurrences had major impacts on U.S. and worldwide markets. The invasion of Ukraine which started in early 2022, is still having effects on markets home and abroad. The conflict that’s been silent going on in the Middle East between Palestine and Israel escalated in 2023 and found a place in the mainstream and not so mainstream media. This had impacts on global finance/markets, but also on countries politics and decision making. Let’s take a look at 2023 and how much it changed the current trajectory of our markets, investments, and lives.

Firstly, the three major U.S. markets increased an incredible amount this year. The Nasdaq Composite, which consists of thousands of U.S. companies, increased 44.52% throughout 2023. Most of those gains took place within the last few months of 2023, starting in late October. The S&P 500, which looks at the largest 500 companies in the U.S, increased 24.73% over the year. Again most of the gains happened towards the end of the year in the fourth quarter. The Dow Jones Industrial Average, one of the oldest market indexes, increased a measly 13.74%. The Dow Jones usually moves at a much lower rate and is much less volatile than the Nasdaq or S&P. Throughout the three indexes' history since 1984, the Nasdaq has increased 5,114.09%, the S&P 2,717.72%, and the Dow Jones 2,829.30%. 1

IEP might be the largest or most memorable stock decline of the year, but there are companies that completely failed during the year. There were five bank failures of 2023. The most known, or the largest, was Silicon Valley Bank, with approximately $209,000 Million assets at the time of failure, which happened on March 10th, 2023. The FDIC took control of the company and liquidated all of its assets to protect depositors. 3 The next largest bank was First Republic Bank which closed doors on May 1st, 2023, which had more assets than Silicon Valley Bank, but only 2/3s the deposits, at $103,900 Million. JPMorgan Chase Bank and National Association assumed all of the bank's deposits. 3 Three other banks failed in 2023, Signature Bank on March 12th, Citizens Bank on November 3rd, and Heartland Tri-State Bank on July 28th. In total, 548,705 Million dollars of assets were assumed by other organizations or dealt with by the FDIC.

One story that we want to share are the workers strikes around the country during 2023. The U.A.W or United Auto Workers union held one of the largest strikes in U.S. history. The strike lasted from September 15th to October 30th. It ended with Ford reinstating 2023 guidance, which is said to cost $8.8 billion. 4 Stelantis and GM also approved the contract settlement which ended the UAW strikes.

With increasing inflation in 2022 and 2023, the Federal Reserve had to act. The Federal Reserve can do a few different things to help reduce inflation. The first, which is less common, is to reduce government spending and increase taxes. The second thing the FED can do, which is more common and what they did throughout 2022/23, is increase interest rates. The Federal Reserve started increasing interest rates in February 2022. From then, to the end of December 2022, they raised the rates from .08% to 4.10%. After December 2022, with inflation still being high, they continued to raise rates in 2023. Going from 4.10% to 5.33% and stopping there in August 2023. 5 With all the talk surrounding interest rate hikes, what actually happened that caused inflation? According to the Bureau of Labor Statistics, there were three main causes: volatility of energy prices, backlogs of work orders for goods and services caused by supply chain issues due to Covid-19, and price changes in specific industries. 6 When looking at the data, corporate profits were astronomically higher during 2020-2021 compared to previous decades. To put this into simple words, a lot of the inflation was caused by corporate greed and price gouging.

A lot happened in 2023. In this review we discussed most of it, but there are some honorable mentions we’d like to make sure you knew about.

  • PGA Tour and LIV Golf agree to merge.

  • Barbie and Oppenheimer movies dominate the box office and send viewers back to the theaters.

  • A crazy year for increasing the value of stocks.

  • Taylor Swift’s Eras Tour sets records in 2023.

  • Increase in protests over the Ukraine/Russia and Palestine/Israel conflicts.

  • Sam Bankman-Fried is convicted and is expected to appeal.

  • Bitcoin and other cryptocurrencies increase in value.

International markets also saw a major increase in value over 2023. Only a few declined, and among the increasers are some of the largest overseas indexes. The Japanese Nikkei 225 increased 28.24% last year. The Korean Kospi increased 18.73%. The German DAX Performance Index increased 20.31%. Frances Ibex 35 up 22.78%. The Indian Nifty 50 increased similarly to the DAX, at 20.03%. And lastly, the FTSE 100 increased a measly 3.78%, still an increase though. Among the top decliners for 2023 were the Hang Seng Index, which is Hong Kongs, and the SSE Composite Index, which is China’s major stock index. The Hang Seng Index fell 13.82% in 2023, and the SSE Composite fell 3.70%.

As 2023 ended, we learned a lot about our financial and economic systems. We learned that not all inflation is from rising labor prices or prices of goods, but from corporate greed and the need for ever increasing profits. International events caused record breaking protests and financial events over the year. Movies in theaters made a comeback, and regional banks took massive hits. With all the turmoil around the country and world, financial markets performed the best they have in a long time. The Nasdaq, S&P, and Dow Jones all made crazy increases over the year. It seems the more hardship and pain regular people and those overseas endure, the more corporations profits increase, and the more stocks and markets increase in value. With all that being said, let’s see where 2024 takes us.

Sources

1 “Nasdaq Composite Price, Real-Time Quote & News.” n.d. Google Finance. Accessed January 3, 2024. https://www.google.com/finance/quote/.IXIC:INDEXNASDAQ?comparison=INDEXSP%3A.INX%2CINDEXDJX%3A.DJI.

2 “Icahn Enterprises: The Corporate Raider Throwing Stones from His Own Glass House.” 2023. Hindenburg Research. May 2, 2023. https://hindenburgresearch.com/icahn/.

3 FDIC. 2023. “FDIC: Bank Failures in Brief.” Www.fdic.gov. 2023. https://www.fdic.gov/bank/historical/bank/bfb2023.html.


4 Wayland, Michael. 2023. “Ford Reinstates 2023 Guidance, Says UAW Deal to Cost $8.8 Billion over Life of the Contract.” CNBC. November 30, 2023. https://www.cnbc.com/2023/11/30/fords-2023-guidance-uaw-deal-cost.html#:~:text=Autos-.

5 FRED. 2023. “Effective Federal Funds Rate.” Stlouisfed.org. November 1, 2023. https://fred.stlouisfed.org/series/FEDFUNDS.

6 Hernandez, Richard. 2023. “What Caused Inflation to Spike after 2020? : Monthly Labor Review: U.S. Bureau of Labor Statistics.” Www.bls.gov. January 2023. https://www.bls.gov/opub/mlr/2023/beyond-bls/what-caused-inflation-to-spike-after-2020.htm.