2023 is expected to face a recession of all times, and though consumers and investors are bracing for it, it does not mean it will not be hurtful.
According to Barclays Capital, 2023 will go down as one of the worst years of recession in the last four decades. An odd of 65% is considered for a severe global economic downturn by Ned Davis Research Inc. London Based investment Management Company Fidelity International feels the hard landing looks increasingly possible.
Bloomberg News has kick started the year, collating more than 500 Strategists’ calls on Wall Street for theahead. Investors who faced the 2022 crash find this year’s forecast as grim and threatened investment scenario with fresh pains.
The broad consensus is that even if the recession is mild, it will hit globally. On the other hand, Federal Reserve is continuing its aggressive monetary policy tightening, continuing interest rates hike even as inflation has peaked. There are no signs of a pivot for any dovish policy.
Hope for a Turnaround
It is still time for humility for forecasters who failed to correctly predict the double-digit losses in the stock market and the 2022 inflation that led to a crisis in the cost of living. The consensus for recession can be proved wrong again this year and spring a host of positive surprises. Wall Street giants JPMorgan Chase & Co, Goldman Sachs Group Inc., and UBS Asset Management, on their part, forecast an economy that could well defy the bearish trend. As price hike eases, investors could gain significantly if they can time the market right.
Investors can expect trading to be uneven this year. Deutsche Bank AG predicts S&P 500 index to rise to 4500 in the first of 2023 before declining 25 % in the third quarter, and it is expected to rebound to 4500 in the final quarter to provide recovery to investors.
It looks like investors will make money in bonds finally. This asset class delivered the biggest loss of the modern era in 2022. The US Treasury bond 10-year yield is expected to drop to a low of 2.65% by the end of 2023 by UBS Group AG.
Crypto Craze Over
The cryptocurrency market bubble also burst, with investment firms no longer talking about the industry. This after they spent years peddling digital currency to traditional investors and hyping up the mania for investments, projecting crypto as digital gold for the future. The 2023 outlook for crypto investment looks all but over.
Covid is now a distant memory for macro strategists, at least. The pandemic s the only reference for material consideration, given China’s risky effort to quickly reopen its economy. The outcome of such a move can have massive consequences for the consumption cycle and world investment.
