January 5, 2023

The U.S. stock market registered a decline in December to put an end to a dreadful year for financial markets.   Investors had plenty to worry about as the benchmark 10-year Treasury yield crept back towards 4.0% following sobering talk and actions from the Federal Reserve mid-month.  In addition, while hard to quantify, there was most likely a significant amount of tax-loss selling providing additional pressure on the market during the month. The S&P 500 index declined 5.8% in December.  Consumer Discretionary (-11.3%) and Information Technology (-8.4%) were the worst performing sectors in December while Utilities (-0.5%) and Health Care (-1.9%) were the best performing sectors. From a style perspective, value edged out growth in the large- and mid-cap space, while growth and value returns were about equal for small-cap stocks.  Small-cap stocks slightly lagged large- and mid-cap stocks from a market cap perspective.