2023 Q4 Commentary

Market Review

Forecasts of a recession failed to be realized in 2023 and were replaced by expectations for a soft landing and cooling inflation pressures in 2024. As we exited 2023, investors recalibrated their expectations for interest rates to include several cuts by the Federal Reserve over the year ahead. Yields on the benchmark U.S. Treasury 10-Year Bond fell from a high of nearly 5% in October to just under 4% at the end of the year. Stocks reacted enthusiastically and surged in the fourth quarter, with both the large capitalization S&P 500 and small capitalization Russell 2000 indices rising over 10% in the period. While small cap stocks outperformed in the fourth quarter, large cap stocks bested their smaller cap brethren for the full year.

Conestoga’s four primary investment strategies posted mixed results for the full year 2023, with our Small Cap Growth and SMid Cap Growth strategies outperforming while the Micro Cap Growth and Mid Cap Growth strategies underperformed.