With 2023 upon us, Barron’s collaborator Nicolas Jasinski believes US stocks could tumble next year on an expected recession before rebounding on better economic prospects in 2024.
Baron recently interviewed eight investment strategists and their average forecasts proved itS&P 500 index It could close at 4233 by the end of 2023, 9% above current levels. Including dividends, the total return could exceed 10%.
This compares favorably with the performance of 2022, a year that saw many assets suffer their worst year on record, not just stocks but bonds as well. The S&P 500 is down about 20% this year, while the Bloomberg US Total Bond Index is down about 11%. But the good thing is that stock valuations have declined and the benchmark US Treasury yield is around 4%, which is more attractive than it used to be.
Affected by monetary policy tightening and geopolitical shocks, stocks, bonds, real estate,cryptocurrencyEveryone fell and investors had few safe havens, such as the US dollar and commodities.
If a series of rate hikes by the Federal Reserve pushes the United States into a recession, stocks could slide in 2023 as they have this year, Jasinski said. But if the economy slows, it could also help bring inflation closer to the Fed’s 2% target. As long as the Fed suspends monetary tightening, it can create the conditions for the stock market to rebound.
