What a wild ride 2023 has been.

With inflation in retreat and interest rates projected to decline (both on FED and market watch), the following are what I think should be playing out.

1. Sovereign bonds - decent yield, reasonable real returns above long trend inflation even at todays 4%. The higher interest rate goes, the higher your duration should be. So for US treasury investors, plenty should have bought in the 10Y to 30Y treasuries given the 5 - 5.2% yield in October.

2. Equities. Not all equities are born the same. The S&P 500 is not even the same as the magnificent 7. Nevertheless, here is what I am observing:

- With the broadening of the markets from 7 to 500, we expect the index to rise another 10-12% to around 5200. Likely to stay in that range for a bit till any next catalyst or crash.

- China did not play out