Market Recap – December 8, 2023


  • Artificial Intelligence: Google’s share price surged this week due to them unleashing their new AI Large-Language-Model (LLM) named Gemini. Gemini performed better than ChatGPT on almost all measures that are used to test LLM’s. This is an anything-to- anything LLM, which means it can translate text-to-video, video-to-text, pictures-to- video, etc. [1]
  • Labor: Unemployment rate unexpectedly drops to 7% from 3.9% due to auto and motion picture workers returning to the workforce. This surprise reverberated through the bond markets due to decreasing the likelihood of recession, which caused bond yields to increase. [2]
  • Oil: The price of oil dropped below $70 a barrel on demand worries from the S. economy and a non-unified OPEC+ meeting in which they could not come to a unanimous output cut decision, in which they had to settle on a voluntary cut. [3]

Chart of the Week:

Source: BEA, Bloomberg, J.P. Morgan Asset Management.


  • Unemployment: Looking underneath the hood of the unemployment rate surprise, around 47,000 of the 199,000 jobs added were due to the return of auto and motion picture workers coming back from strike. This strike appears to be what caused unemployment to rise to 3.9% in the first place, therefore, delaying the weakness that was previously seen. Overall, while the labor market is weakening from its strongest point, it remains strong. With the idiosyncrasies of the strikes over, we can get a clearer picture of the labor market moving forward. [2]
  • Interest Rates: The Federal Reserve has concluded its interest rate hikes for this cycle and is expected to maintain a steady interest rate policy until Q2 of 2024, followed by a gradual decrease. With unemployment coming back stronger than expected, the probability of a fast rate decrease has lowered. This dynamic will continue to put pressure on bond markets. However, it’s important to acknowledge that a supply-side shock could potentially alter this outlook.
  • Inflation: Inflation and short-term inflation expectations are coming to cycle lows due to higher interest rates, easing of supply chain pressures, and easing of oil prices. We expect this trend to continue through the first half of 2024 unless there is a major supply shock. The combination of the labor markets holding steady, inflation cooling, and interest rates set to come down in 2024, the probability of a goldilocks moment is increasing. [4]


  1. Google Unveils Its Revolutionary New Large Language Model: Gemini (
  2. Treasury Yields Rise as Fed Rate-Cut Expectations Ebb After US Jobs Report – Bloomberg
  3. OPEC+ agrees to deepen voluntary oil output cuts | Reuters
  4. Inflation expectations plunge in closely watched University of Michigan survey (

Bridge Advisory LLC Disclosures

Bridge Advisory, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. Investment Advisory Services offered through Bridge Advisory, LLC. Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type. Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Information herein has been obtained from sources believed to be reliable, but Bridge Advisory, LLC. does not warrant its completeness or accuracy; opinions and estimates constitute our judgment as of this date and are subject to change without notice. This newsletter expresses the views of the authors as of the date indicated and such views are subject to change without notice.

By: Nick Colletta, CFA, CAIA

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