NEW YORK, NEW YORK – DECEMBER 29: Traders work on the floor of the New York Stock Exchange (NYSE) on the last day of trading for the year on December 29, 2023 in New York City. The Dow was up slightly in morning trading in what has been a strong year for the stock market despite many economists predictions that the American economy would experience a recession. (Photo by Spencer Platt/Getty Images)
Spencer Platt | Getty Images News | Getty Images
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What you need to know today
Last trading day of 2023 U.S. stocks fell Friday, disappointing investors who were hoping the S&P 500 would close the year on a record high. Still, it was a mighty good year for major indexes. Europe’s Stoxx 600 index added 0.2%, giving it a 12.6% gain for the year. Germany’s DAX posted more impressive gains, rising 20.31% despite the country’s gloomy economic outlook.
Nasdaq rebound The Nasdaq Composite popped 43% in 2023, its best year since 2020. Only 2020 and 2009 saw bigger gains for the tech-heavy index, which is all the more impressive considering how the Nasdaq plunged 33% in 2022. What changed last year? The biggest story: Investors returned to risk, driven by a surge in generative artificial intelligence and the U.S. Federal Reserve halting rate hikes.
Bullish on bitcoin Bitcoin rallied about 152% in 2023 despite high-profile criminal cases against cryptocurrency exchanges FTX and Binance. Bitcoin was last trading slightly above $44,000 — and many industry executives think the cryptocurrency’s poised for a new bull run, thanks to an event known as “halving” and the potential approval of a bitcoin exchange-traded fund in the U.S.
Price-sensitive consumers U.S. companies are losing their pricing power. During the pandemic, consumers splurged on goods — and when the pandemic was over, services, like eating out and traveling, were in hot demand. Companies took advantage of that willingness to spend and increased their prices to pad their earnings. But in 2023, consumers are cutting back — and it’s affecting Wall Street.
[PRO] Things to look forward to Investors have reason to be optimistic in 2024, writes CNBC’s Sarah Min. The three interest rate cuts that the Federal Reserve has penciled in for this year will likely be a tide that lifts all boats, meaning that last year’s Magnificent Seven-driven rally should broaden out. But not everyone’s so bullish about 2024.
The bottom line
Instead of ending the year with a bang by surpassing its all-time high, the S&P 500 let out a whimper — to paraphrase the poet T.S. Eliot’s famous lines — and fell 0.28% on the last trading day of 2023.
As with any market move, it’s hard to attribute any definitive reason to it. I think, however, the S&P’s December rally was too reliant on the Federal Reserve’s dovish pivot. Without further positive news, and with the optimism priced in already, the S&P didn’t have a concrete reason to rise further.
Moreover, several analysts have pointed out that stocks are already priced above their fair valuation; that is, the price of a stock may be too high relative to its earnings per share.
“Arguably, the bull market is overbought, and there are too many bulls,” Ed Yardeni of Yardeni Research wrote. Echoing that sentiment, Sarat Sethi, managing partner at DCLA, told CNBC he thinks “valuations are stretched.”
Still, let’s not throw away the baby with the bathwater. Friday’s disappointing session aside, 2023 has been a banner year for a huge swathe of the market. Here are, in my book, the biggest winners and losers of last year:
Winners
U.S. indexes: For 2023, the S&P jumped 24.23%, the Dow gained 13.8% and the Nasdaq rocketed 43.42%.
Bitcoin: Shrugging off the high-profile criminal cases against FTX and Binance, bitcoin surged around 152%.
Gold: The precious metal recorded its first annual gain since 2020 of 13%, as geopolitical risks and peak interest rates made gold shinier to investors.
Losers
Although part of financial journalism necessarily involves making predictions, a quick glance at that list shows how difficult it is to do so. Going into 2023, many thought a recession was in the cards. Instead, markets were dealt a winning hand. Here’s hoping 2024 thwarts all the negative predictions and delivers positive surprises too.
The California Air Resource Board (CARB) has withdrawn its request to enact the proposed Advanced Clean Fleets rule, which required fleets that are “well-suited for electrification” to reduce emissions through the phase-in of Zero-Emission Vehicles (ZEVs) and the banning of commercial diesel sales after 2035.
“Frankly, given that the Trump administration has not been publicly supportive of some of the strategies that we have deployed in these regulations, we thought it would be prudent to pull back and consider our options,” CARB chair Liane Randolph said in an interview. “The withdrawal is an important step given the uncertainty presented by the incoming administration that previously attacked California’s programs to protect public health and the climate and has said will continue to oppose those programs.”
Here’s hoping the BEVs and ZEVs have better luck next round.
Electrek’s Take
While some may celebrate the delay of the Advanced Clean Fleets rule, their celebrations will undoubtedly prove to be myopic and short-lived. The reality is that America is no longer the world leader in technology or transportation that backward organizations like the American Trucking Association believe it to be, and the fact is that delaying a transition to cleaner, more efficient technology will only put the US further behind its economic rivals in Asia and the Middle East.
Even before this Pyrrhic victory for American truck brands that have been slow to push BEVs into production, demand for diesel was at a generational low, and companies like Volvo, Renault, and Mercedes-Benz have been logging millions of electric miles on their deployed trucking fleets.
All of which is to say: if you thought it was going to be hard for American brands to catch up before, it’s going to be even harder now.
In an official announcement released at 8:15PM last night, Walmart-backed electric van company Canoo filed a voluntary petition for relief under Chapter 7 of the US Bankruptcy Code and will cease operations immediately.
“We would like to thank the company’s employees for their dedication and hard work,” said Tony Aquila, Canoo CEO and one of the company’s largest investors (according to the press release). “We know that you believed in our company as we did. We are truly disappointed that things turned out as they did. We would also like to thank NASA, the Department of Defense, The United States Postal Service (‘USPS’), the State of Oklahoma and Walmart for their belief in our products and our company. This means a lot to everyone in the company.”
As a result of the chapter 7 filing, Canoo will cease operations effective immediately, 8:15PM on 17JAN2025. The next step in the company’s dissolution will see a court-appointed trustee manage the liquidation of the company’s remaining assets.
Electrek’s Take
Rumors fueled by outspoken former employees of Canoo began circling late last year, with furloughed employees urging Oklahoma state leaders to “hold the electric vehicle company accountable” after it shuttered the OK production line that had received more than $100 million in state incentives.
The same employee claims that the company was being wildly mismanaged, and that what few Canoo vehicles the company said it had built in the Oklahoma plant were actually built in Texas, and that no vehicles were actually ever built in OK. “Nothing was functioning,” the unnamed employee said, speaking to local news channel KFOR. “There was no, there was not one robotics line that actually worked to fabricate a part.”
You could argue that the employees should also be held accountable for happily collecting paychecks without actually producing anything this whole time, but that’s a conversation for another day. For now, I’ll be mourning the loss of what could have been a fun little domestic off-roader, and hoping Canoo’s employees find a soft landing and better jobs elsewhere.
The US Department of Energy (DOE) today announced $1.2 billion in financing to replace Puerto Rico’s fossil fuel plants with solar and battery storage through 2032.
The DOE’s Loan Programs Office announced two conditional commitments and one loan closing to power producers in Puerto Rico. Each supports a project contracted with the Puerto Rico Electric Power Authority. The announcements include:
The closing of a $584.5 million loan guarantee to subsidiaries of Convergent Energy to finance a 100 MW solar farm with a 55 MW (55 MWh) battery energy storage system (BESS) in the municipality of Coamo and BESS installations in the municipalities of Caguas (25MW/100MWh), Peñuelas (100MW/400MWh), and Ponce (up to 100MW/400MWh)
A conditional commitment for a loan guarantee of up to $133.6 million to a subsidiary of Infinigen for a 32.1 MW solar farm with an integrated 14.45 MW (4.76 MWh) BESS, and a co-located standalone 50 MW (200 MWh) BESS expansion in the municipality of Yabucoa
A conditional commitment for a loan guarantee of up to $489.4 million to a subsidiary of Pattern Energy for three stand-alone BESS in the municipalities of Arecibo (50 MW/200 MWh), and Santa Isabel (50 MW /200 MWh and 80 MW/320 MW), and a 70 MW solar farm with an integrated BESS in the municipality of Arecibo.
If all are finalized, these projects would more than double LPO’s support for utility-scale solar generation and battery energy storage in Puerto Rico.
LPO provides low-cost financing and a rigorous due diligence process, making it a valuable resource for Puerto Rico as it works to rebuild an affordable, reliable, and clean energy system. As a result of reliance on imported fuel, the persistent threat of tropical storms, and underinvested infrastructure, Puerto Ricans today face average energy costs that are twice the US average – all while consuming only one-quarter of the energy of the US per capita.
LPO’s initial loan to a power producer in Puerto Rico, Project Marahu, closed in October 2024, and when complete will add more than 200 MW of solar and up to 285 MW of stand-alone energy storage to Puerto Rico’s grid.
Through its September 2023 partial loan guarantee to Project Hestia, LPO also supports virtual power plant (VPP)-ready rooftop solar and battery storage installations in Puerto Rico. As a nationwide project, Hestia’s sponsor is committed to at least 20% of installations under Project Hestia going to homeowners in Puerto Rico.
As part of its procurement plan, Puerto Rico Electric Power Authority seeks to install 1,500 MW of battery storage and requires a minimum capacity of storage to be co-located with each utility-scale solar project. Energy storage systems currently online in Puerto Rico are being dispatched every day.
When including Marahu, LPO’s closed and conditionally committed financing supports over 100% of the capacity Puerto Rico Electric Power Authority aimed to procure under its initial request for energy storage project proposals, the first of six.
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