2023 STOCK MARKET ANALYSIS ACTIVITY Directions: Read the article below regarding the current stock market climate. Annotate the article using the symbols provided. YOU WILL BE GRADED FOR YOUR ANNOTATIONS. Answer the three questions following the article !!! ??? Symbol (underline) +++ Important Information Meaning You made a connection to real world experiences or events Question or confusion about something stated in the text Key word/details (important info to the main idea of the text) Parts you agree with Parts you disagree with Something you understand completely Unfamiliar Vocabulary Word Stocks close out 2023 with a 24% gain, buoyed by a resilient economy By moneywatch via cbsnews.com Investors have plenty to cheer as 2023 draws to a close, with the S&P 500 ending the year with a gain of more than 24% and the Dow finishing near a record high. Easing inflation, a resilient economy and the prospect of lower interest rates buoyed investors, particularly in the last two months of the year. The benchmark S&P 500 index inched lower Friday, the last trading day of 2023, but ended the year with a 24.2% gain. The Dow Jones Industrial Average rose more than 13% this year, and the Nasdaq soared 43%, driven by gains in big technology companies, including Nvidia, Amazon and Microsoft. The rally that started in November helped broaden the gains within the market beyond just the big technology companies. Investors were also buoyed by a December forecast from the Federal Reserve that it plans to cut interest rates three times in 2024. The rally marked a big psychological shift for investors, said Quincy Krosby, chief global strategist at LPL Financial. "Investors were able to accept that fact that the market would close the year on a higher note," Krosby said. "Above all else, it was broad participation in the market that reinforced and confirmed gains for smaller company stocks were particularly important." Most major indexes were able to erase their losses from a dismal 2022. Smaller company stocks had a late rally, but managed to erase the bulk of their losses from last year. The Russell 2000 index finished 2023 with a 15.1% gain after falling 21.6% in 2022. "Broadening participation predicated on falling interest rates and signs of a soft-landing scenario have underpinned the recovery," noted Adam Turnquist, chief technical strategist for LPL Financial, in a research note earlier this month. montary It's possible the rally could continue, he added. "Over the last 100 years, and filtering for record highs occurring at least three months apart, upside momentum has historically continued," he noted. The Magnificent 7 The broader market's gains were driven largely by the so-called Magnificent 7 companies, which include Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla. They accounted for about two-thirds of the gains in the S&P 500 this year, according to S&P Dow Jones Indices. Nvidia lead the group with a gain of about 239%. Investors in the U.S. came into the year expecting inflation to ease further as the Federal Reserve pushed interest rates higher. The trade-off would be a weaker economy and possibly a recession. But while inflation has come down to around 3%, the economy has chugged along thanks to solid consumer spending and a healthy job market. The stock market is now betting the Fed can achieve a "soft landing," where the economy slows just enough to snuff out high inflation, but not so much that it falls into a recession. As a result, investors now expect the Fed to begin cutting rates as early as March. The Fed's signal that it will make three quarter-point cuts to the benchmark rate next year could add more fuel to the broader market's momentum in 2024. That rate is currently sitting at its highest level, between 5.25% and 5.50%, in two decades. High interest rates and Treasury yields hurt prices for investments, so a continued reversal means more relief from that pressure. Wall Street is forecasting stronger earnings growth for companies next year after a largely lackluster 2023, with companies wrestling with higher input and labor costs and a shift in consumer spending. 1. What happened in the stock market towards the end of 2023? Was the stock market showing gains or losses and explain some specific examples from the article to show whether there was overall gains or losses in 2023? 2. After reading the article, there was something described as the "magnificent 7" What is the article referring to and what companies were a part of this "magnificent 7". Which specific company was the leading in gains for 2023 and why? 3. What are investors expecting the Fed to do to interest rates in the year 2024? In the article, after the Fed implements its change what are investors than expecting the economy to look like?