Happy New Year! 🥳 

On behalf of the Blossom team, I wish you a very Happy New Year!

2023 was an exciting year for Blossom, with our incredible community growing from only 5,000 in January to over 75,000 today! We are so thankful for each one of you and can’t wait to keep making Blossom better and better in the new year ❤️

Now, let’s dive into the last Buzz of the year! 🐝

Max, CEO of Blossom

TOP STORY
📈 S&P ends 2023 up 25%! What’s in Store for 2024?

On the final day of 2023, it's time to reflect on the year and look forward to what the future holds. One of the most surprising aspects of 2023 was the absence of a highly anticipated recession.

🤔 What is a recession?

With high interest rates, inflation, and many other factors placing a great strain on us all, it begs the question if this wasn’t a recession - what is?

That’s the tricky part. One common definition of a recession, ‘two consecutive quarters of negative GDP growth’, already happened in the US in Q1 and Q2 of 2022, but pundits claimed that the true definition is a ‘significant decline in economic activity spread across the economy that lasts more than a few months’ and say that this never happened.

Definitions aside, many economists expected growth to slow sharply in 2023 which evidently didn’t happen. Instead, the US economy grew every quarter and the S&P ended the year up ~25% (compared to a -20% return in 2022).

💡 What factors led to this resilience?

1) 🤑 Consumer Spending

With trillions of dollars injected into the economy during the pandemic by massive government stimulus policies, consumers had excess savings, leading to higher spending this year than anticipated. These injections were also a key driver of the high inflation.

2) 🔐 Locked in Interest Rates

Many consumers and businesses had locked in low interest rates on mortgages and loans, decreasing exposure to interest rate hikes. This ‘lock-in effect’ was even more pronounced in the US where the common mortgage term is 30 years (compared to 5 years in Canada).

3) 🧑‍⚕️ Labour market resistance

Sectors hit hard during the pandemic, such as leisure and hospitality, contributed to surprising gains in the labor market. Together with healthcare and education, these sectors drove 70% of the job gains.

🔮 What’s in Store for 2024?

Many experts predict a return to normalcy, with 3 rate cuts planned for 2024.

Despite this, many Wall Street analysts don’t see as much upside in the market for 2024, with the median target projecting a measly 2% gain in the S&P 500 index.

That said, if 2023 is any indicator, the predictions aren’t always right and we’ll have to wait and see what the new year has in store!

What do you think is in store for 2024? Join the discussion on Blossom!

OFFERS FOR THE COMMUNITY
🎁 Blossom Offers

• 📊 FREE Passiv portfolio rebalancing tool for Questrade users and 50% off for everyone else

• 👀 FREE credit score from Borrowell

• 💸 Earn 4% interest on cash from NEO’s High-Interest Savings Account

FROM THE BLOSSOM COMMUNITY
🎙️ Top Discussions This Week

CANADIAN MARKETS
🇨🇦  Canadian Tech Stocks: Underdogs Turned Stars

In 2023, the US tech sector was undeniably hot, driven by an investor frenzy for AI stocks. But while the US tech sector was hot, Canada was even hotter 🔥

The Canadian S&P/TSX Composite's tech sector saw a remarkable surge of approximately 70%, surpassing the gains achieved by the S&P 500 Index and the Nasdaq 100, both of which recorded gains of less than 60%.

Canada’s tech sector didn't just outperform its American peers; it surpassed tech indices in Germany, the UK, France, Japan, Korea, Australia, and China. In fact, CIBC World Markets hailed it as "the best performance globally among technology peers."

📈 A Remarkable Rebound

This impressive performance is even more remarkable when we consider the context. The tech sector in Canada was coming off one of its worst years in over a decade, falling a shocking 52% in 2022. This was far worse than the 24% drop experienced by their American counterparts.

In 2023, the stars of the Canadian tech sector included Celestica Inc., a manufacturer of equipment for AI, and e-commerce giant Shopify Inc., often referred to as "Amazon Junior." Shopify, in particular, made a strong comeback after enduring its worst annual performance since going public, ending the year up a whopping 111%.

📆 What Lies Ahead in 2024

While the Canadian S&P/TSX Tech index has enjoyed a banner year, analysts caution against expecting a repeat of the extraordinary returns in 2024. Predictions indicate that there may be more gains to be had in the US tech sector next year.

Even so, while US tech stocks are at all-time highs, the S&P/TSX composite remains 30% away from its peak.

MORE GREAT CONTENT
🥳 Follow Blossom On Socials!

If you like the Weekly Buzz 🐝 make sure to follow Blossom on our socials where Brandon and the Blossom ambassadors make tons of informative short-form videos about topics ranging from best dividend stocks, beginner tips, and other fun content about the stock market! 😊

• 📸 Instagram

• 🕺 TikTok

• 🎥 YouTube

P.S. we love it when you guys tag us on socials! Really appreciate all of you who have been sharing the love and telling your friends about Blossom 🙌 

CHINA
📱Huawei's Quarterly Revenue Grows 27%, is an IPO on the Horizon?

🤑 Huawei reported a remarkable 9% surge in revenue for the year 2023, reaching over 700 billion yuan ($98.7 billion). This impressive growth was driven by a resurgent smartphone business and robust sales in 5G equipment. Quarterly, revenue grew 27%, a sharp increase from the previous quarter.

📱 Huawei made headlines earlier this year by introducing a smartphone equipped with a sophisticated 7-nanometer Kirin processor, marking a significant achievement for China's tech industry. This move challenged US restrictions aimed at limiting China's technological advancements and ignited discussions in Washington questioning the necessity and effectiveness of these restrictions.

🤖 Huawei has also emerged as a major player in the semiconductor industry, a sector of particular interest to the US. The company is establishing a network of chip plants and has received approximately $30 billion in funding from the Chinese government and its hometown of Shenzhen.

👀 Potential IPO in 2024?

Huawei's CEO Ren Zhengfei, who had long maintained that they would never become a publicly traded company, hinted at the possibility of an initial public offering (IPO) if it aligns with China's national interests. While the company had initially focused on serving broader societal goals, the prospect of an IPO now seems plausible under certain circumstances.

Despite this growth, not all has been rosy for the Chinese tech sector, with Tencent ending the year down 10% after yet another government crackdown on the internet sector.

🗞️ What else you might’ve missed:

• Tesla (TSLA) plans a Model Y revamp at its Shanghai factory

• Intel (INTC) nearly tripled S&P 500's gain in December

• Nvidia (NVDA) China Customers to Get Hobbled Version of Gaming Chip

• Nike (NKE) stock plunges on weak revenue outlook as company announces cost cuts

• Apple (AAPL) Apple Resumes Sale of Watches After Appeals Court Lifts US Ban