The Bull-and-Bear Case for 2023 (Published 2022) (2024)

DealBook|The Bull-and-Bear Case for 2023

https://www.nytimes.com/2022/12/27/business/dealbook/markets-stocks-prediction-year-ahead-2023.html

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Market watchers look for optimism amid the gloom

Tech stocks, Treasury bills, cryptocurrencies, real estate. The great market sell-off of 2022 has been indiscriminate, wiping trillions off the stock market capitalization of risky and not-so-risky assets, and taking a huge bite out of average investors’ retirement plans.

Despite the carnage, many investors are sticking with their beaten-down stock portfolios as they head into the new year. “There doesn’t seem to be a lot of people, despite the drawdowns, who are saying, ‘Hey, the pain has been awful,’” Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, told DealBook. “And the reason is, because all things considered, they’re still up 50 percent since the start of the pandemic.”

Ms. Shalett doesn’t see much evidence that the broader stock market is due for a rebound any time soon, but she’s not writing off 2023 either.

Morgan Stanley has a 2023 price target of 3,900 for the S&P 500 and expects the benchmark index to flatline over the next 12 months. (The S&P closed at 3,844 on Dec. 23, down roughly 20 percent this year.)

Still, Wall Street as a whole hasn’t been so divided about the prospects for the next year since the global financial crisis, reflecting deep uncertainty over U.S. monetary policy, corporate profits and a wider debate about whether the world’s biggest economy will fall into recession. The average forecast expects the S&P 500 to end 2023 at 4,009, according to Bloomberg, the most bearish outlook since 1999. But the predictions range from a low of 3,400 to as high as 4,500, representing “the widest dispersion since 2009,” Ms. Shalett pointed out.

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