Wall Street predicts turbulent first six months but growing optimism at ebbing inflation, slowing pace of rate hikes and China’s reopening
Photograph: Timothy A Clary/AFP/Getty ImagesPhotograph: Timothy A Clary/AFP/Getty Imagesnvestors should brace for another turbulent year in the financial markets, economists have warned as central banks fight inflation, China reopens its economy after Covid-19 restrictions andThe first half of the new year is likely to be choppy, according to Wall Street predictions, afterBut the US S&P 500 is still expected to end 2023 a little higher than it began the year.
Michael Antonelli, managing director and market strategist at investment bank Baird, predicted the Fed would end its hiking cycle in February, and “hit the pause button” after one more rate rise. He also expects the US stock market to make gains during 2023, pointing out that two consecutive falls are “very rare”.
Strategists at Russell Investments believe a recession seems likely in 2023 and equity markets may struggle but remain hopeful a global economic recovery should be on the horizon by year-end.this year is going to be “tougher than the year we leave behind”, with a third of the world’s economy in recession
“We see the world plunging into a global recession in 2023. The recession is going to be the result of the immense monetary tightening the central banks have administered over the past 12 months. As a silver lining, it will sow the seeds for a substantial retracement of inflation,” Schmidt said.
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