A Roller Coaster Year in Review

Sophie Lalonde, Founder at 3D Financial presents a special article taking a look back at 2023.

As 2023 winds down, let’s buckle up and take a whirlwind tour of the year – a year so eventful, it could give the most dramatic soap opera a run for its money!

Coming into 2023

The Federal Reserve was aggressively raising interest rates in 2022 with a series of 75- basis-point rate hikes. As a result, rates are now over 5% and the Fed seems committed to holding them higher for longer. Stock markets experienced significant declines, and the 10-year Treasury bond was on track for its poorest showing since 1787. The yield curve, traditionally the most accurate indicator of economic trends, pointed towards a recession, and analysts revised profit forecasts downward as companies reported disappointing earnings. Meanwhile, high inflation persisted. Just when we thought we’d seen all the excitement, Fitch stepped in the picture downgrading the U.S. government’s credit rating from AAA to AA+. A recession was imminent according to the consensus, with the only question being how deep. Instead, 2023 showcased economic resilience despite higher rates.

Banking Scare

The banking sector had to lick its wounds following the collapse of Silicon Valley Bank as we saw a sharp decline in regional bank stocks. It looked like all the chips were about to fall with Silvergate Bank going into liquidation and Credit Suisse being acquired by UBS in a Swiss government backed deal. However, after several turbulent weeks, the waters were settling.

U.S. - China Staredown

Following a tumultuous year marked by concerns over spy balloons, a trade war on semiconductor production, and escalating military competition, the relationship between China and the U.S. is concluding the year on a somewhat stabilized note. 

 

This change in dynamics comes in the wake of the recent Asia-Pacific Advancement Conference held in San Francisco. At this conference, significant commitments were made by both the U.S. and China. These include plans to re-establish military communication channels, increase flight frequencies in the upcoming year, and enhance bilateral exchanges in various fields such as education, international student programs, youth engagement, cultural activities, sports, and business collaboration. 

 

Although 2024 could bring new turbulence. From presidential elections in Taiwan and the U.S. to continued trade fights, the U.S. and China face no shortage of problems that could cause a stumble in the new year.

Global Turmoil

As we discuss the current geopolitical climate, it is imperative to acknowledge the devastating conflicts in the Ukraine and the Middle East. The ongoing war between Ukraine and Russia, despite its severe human and economic costs, continues without signs of a ceasefire agreement from either side. The Israel-Hamas conflict is a significant and complex issue rooted in deep-seated historical and geopolitical disputes which recently escalated dramatically after the attack on October 7th. We extend our heartfelt condolences to all those affected by the tragedies in these regions.

Looking Ahead

Having reflected on these significant global challenges, it’s also important to acknowledge the notable advancements and moments of progress we’ve witnessed this year. Particularly striking are the breakthroughs in Artificial Intelligence (AI), a field that I find personally captivating. AI has achieved remarkable growth, fundamentally transforming various industries and aspects of daily life. Its impact is profound, steering us toward a more cohesive,efficient, and intelligent future. 

 

In healthcare, AI is at the forefront of discovering new molecules and drugs, potentially with fewer side effects. This innovative approach holds promise for treating diseases that currently have no cure, including certain forms of cancer. In the financial sector, we are utilizing AI to revolutionize money management and investment strategies. Using algorithms and natural language processing, AI analyzes market trends and makes predictions with greater accuracy, leading to more informed investment decisions. 

 

The most interesting part of AI in my opinion is the automation and robotics which has already led to significant efficiency improvements in manufacturing and logistics. Automated systems powered by AI can optimize production lines, reduce waste, and manage supply chains more effectively. A prime example of this being Tesla’s impressive manufacturing prowess which has allowed them to have much higher margins than their competitors. It’s also important to consider the broader implications of the advancements in automated vehicles and general-purpose robots. I’m excited about getting a humanoid robot for my chores. I’ll be extra polite and friendly to it just in case there’s a robot uprising. I want to make sure it remembers I’m the one who always said ‘please’ and ‘thank you’ when it was laundry day. 

 

These are just a few of the many things that AI will be revolutionizing in the next few years, we should expect it to be integrated in every part of our daily lives soon.

 

As we peek into 2024, we’re not just observers but active participants in shaping what’s to come. And we want you to be a part of this exciting journey! Get in touch with us today and let’s toast to a year of fewer spills and more thrills.

 

Cheers to a prosperous and eventful 2024!

 

Disclaimer:

The information provided in this response is based on general principles and is intended for informational purposes only. It should not be considered as legal, financial, or professional advice. For specific guidance related to your financial needs, it is essential to consult with a qualified professional who can assess your unique situation and provide advice tailored to your specific circumstances and applicable laws.

FINANCIAL HEALTH ASSESSMENT

Need help getting your financial affairs in order? Start your path to financial success today.