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USD December Market Performance

Global equities (MSCI ACWI Index) rallied by 4.8% in USD and bonds (Barclays US Aggregate Bond Index) appreciated by 3.8%.

Noteworthy developments

Continued strong rally to end the year!  Global equities (MSCI ACWI Index) rallied by 4.8% in USD and bonds (Barclays US Aggregate Bond Index) appreciated by 3.8%.  These strong rallies were driven by sharply falling bond yields which in turn were driven by favorable inflation data. Markets are increasingly pricing in substantial rate cuts in the US and Europe during 2024.

Global Equities

Global equities were up 4.8% with widespread large gains across major regions.  The S&P 500 was up 4.5% as Treasury yields continued to sharply decline during the month driven by favorable inflation data and by slowing employment growth. Lower than expected amounts of Treasury bond auctions also contributed to falling bond yields. US 10-year Treasury bond yields fell from 4.32% to 3.88% over the month and have declined over 100bps since the end of October. International developed stocks (MSCI EAFE Index) were up 5.3% in USD driven by solid underlying appreciation and currency translation benefits as the USD weakened during the month.  European stocks rallied due to falling bond yields despite continued macroeconomic weakness in Europe. Headline and core inflation also declined more than expected in Europe. Emerging market equities (MSCI EM Index) were up 3.9% with strong performance from Korea, Taiwan, and India equities driving gains. Globally, growth and value stocks both performed well (+4.2% and +5.4%). Industrial and financial stocks performed best (+7.6%, +5.8%) while energy performed worst (+0.5%).

Fixed Income

The benchmark US-Aggregate Bond index was up 3.8% on the month (following November’s +4.5% performance). As interest rates declined sharply during the month, US Treasuries (65% of the benchmark) were up 3.4%, and investment-grade corporate credit (roughly 25% of the index) was up 4.3%. High-yield bonds were up 3.7% as bonds benefitted from lower interest rates and tightening corporate spreads. Leveraged loans were up 1.6% with performance driven by high coupon income (stable base rates) coupled with tightening spreads.


The HFRX Global Hedge Fund Index was up 1.4% for the month with gains widespread across  strategies. Directional strategies such as hedged equity and credit strategies performed well at +1.6% and +3.0% respectively.  Merger-arbitrage and convertible-arbitrage strategies also performed  strongly at +2.1% and +3.8%. Macro / trend following strategies performed worst at +0.2%.


Carlson: +2.6%

Unusually strong month for Carlson with performance driven by closings of certain M&A deals and narrowing M&A spreads in general.  

Eminence: +12.9%

Strong outperformance vs. MSCI World and S&P Midcap Index benchmarks (+4.9% and 8.7%) driven by a) idiosyncratic performance of certain software and other growth stocks and b) exposure to small caps with the Russell 2000 Index up 12.2% for the month.

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