My Latest "Prediction" For 2023BY George Yacik
Assumption that the Fed was responsible for about half of the stock market’s 600% gain from the March 2009 bottom of 683.
So, if we cut that 600% gain in half, that would reduce the S&P’s gain to a still respectable 300%, or a little below 3,000.
I now believe the Fed won’t have to drive the economy into the tank in order to get inflation down to where it wants it to be, probably in the 2.5% to 3% range.
The Fed itself is now forecasting that inflation will fall to 3.1% next year before declining in 2024 to 2.5% and 2.1% in 2025, i.e., putting it at its long-term target.
So my latest “prediction” is that we are a lot closer to the bottom in stocks now than another 20% drop would warrant, and that 2023 could be a good year for the market.
“The Covid-19 pandemic might not be gone, but the global supply-chain crisis it spawned has abated. Goods are moving around the world again and reaching companies and consumers… Gone are the weekslong backlogs of cargo ships at large ports. Ocean shipping rates have plunged below prepandemic levels.”
“Chip inventories swell as consumers buy fewer gadgets,” another Journal article proclaims. “Semiconductor companies slash production plans amid weak demand. The world is now awash in chips.”
The Fed has already raised interest rates close to what it says will be their end point. Gasoline prices have plunged despite the ongoing war in Europe. Used car prices have declined. Home sales have plummeted. Rental prices have dropped, to the point where builders are holding back on adding more supply.
Conclusion: The Fed’s job is almost done, barring some new unforeseen crisis. That should give us some optimism for 2023.
Source: ino.com
https://www.ino.com/blog/2022/12/my-lat ... 65hiXZBxRY
It's all about "how much you made when you were right" & "how little you lost when you were wrong"