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QUARTERLY ECONOMIC OUTLOOK | Q4 2023 The year ahead: Soft landing or hard slog? By: James R. Solloway, CFA, Chief Market Strategist and Senior Portfolio Manager 2024 SEI ® Data as of 12/31/2023 unless otherwise indicated. 1 Investor sentiment is currently enthusiastic over the prospect of a soft economic landing and a return to 2% inflation. Both bonds and stocks appear overbought on a near-term basis, so some kind of price consolidation would not be surprising. The extent of any correction in risk assets will depend on changing perceptions on economic growth, the corporate-profits outlook, the path of inflation and central-bank responses. At the beginning of 2023, investors were battered and bruised following sharp declines in both bonds and equities. As Exhibit 1 shows, the only asset class that performed well in 2022 was commodities—which typically comprise only a small portion of a diversified portfolio. The past year was kinder to investors—up to a point. U.S. large-cap stocks, as represented by the Russell 1000 Index, gained a stellar 26.5% in 2023. Of course, much of that appreciation was driven by a rather narrow selection of mega-cap technology stocks. Overall, 2023 saw quite the reversal from the previous year. Exhibit 1: The last became first, and the first became last in 2023 Source: FactSet, SEI. Indexes included: Commodities = Bloomberg Commodity Total Return Index, Inflation linked = Bloomberg US TIPS (1-5 Year) Index, EMD = 50/50 JPM EMBI Global Diversified / GBI EM Global Diversified Index, High yield = ICE BofA US High Yield Constrained Index, Long duration = Bloomberg long Government/Credit Index, U.S. investment grade = Bloomberg US Aggregate Bond Index, EME = MSCI Frontier Emerging Markets Index, International equity ex-U.S. = MSCI World ex USA Index, U.S. small cap = Russell 2000 Index, U.S. large cap = Russell 1000 Index. Index returns are for illustrative purposes only and do not represent actual fund performance. Index returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. -30 -20 -10 0 10 20 30 U.S. Large cap U.S. Small cap International equity ex U.S. Emerging-markets equity U.S. Investment-grade bonds Long duration High-yield bonds Emerging-markets debt Inflation-linked Commodities Benchmark total returns (%) 2023 2022

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