A stock market crash and a Great-Depression-style economy are among the boldest forecasts for 2023.
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Phil Rosen
Jan 3, 2023, 18:50 IST
Traders gather on the floor of the New York Stock Exchange, Friday, March 18, 2016.Associated Press/Richard Drew
Happy new year, readers. I'm senior reporter Phil Rosen.
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Some congratulations are in order: You've officially emerged from the strange, gooey week in between Christmas and January 1st when nothing gets accomplished. Bravo.
Now it's full speed ahead into 2023 — and the first Opening Bell newsletter of the year is a doozy.
I spent time scouring research notes and talking to experts over the last few weeks to see who had the boldest forecasts for the new year.
Let's see what made the cut.
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1. Over the last 12 months, volatility defined global markets. From the crypto winter to Russia's invasion of Ukraine and the Federal Reserve's aggressive monetary policy, investors struggled to find stability.
In 2022, the S&P 500 shed 20%, and strategists at Truist said it could fall further still as weak corporate earnings limit upside.
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But the firm isn't alone in its downbeat view. Morgan Stanley, Bank of America, and Deutsche Bank all forecasted that the key index could tank over 20% at some point this year.
Notably, Tesla stock became subject to a particularly grim prediction. Long-time bear Gordon Johnson of GLJ Research said the EV maker could drop as low as $23 per share, down from about $120 currently.
"They're just a car company that has built too much capacity that they can't sell," he told CNBC in an interview.
"The Fed raised rates in 1929 to squelch financial speculation and then, in 1930, Congress passed Smoot-Hawley, putting 50%+ tariffs on more than 20,000 goods and pushing the global economy into the Great Depression," Wood warned. "If the Fed does not pivot, the set-up will be more like 1929."
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Meanwhile in commodities, consider gold. It's currently hovering around $1,826 an ounce.
What are you most bullish on to invest in for 2023? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.
In other news:
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2. US stock futures rise early Tuesday — an upbeat sign for the first trading day of 2023, after markets closed out last year with their worst losses since 2008. Investors are now bracing for the release of Fed minutes and the monthly jobs report later this week. Here are the latest market moves.
3. Earnings on deck: Pasofino Gold, Lotus Ventures, and more, all reporting.
5. Fundstrat's Tom Lee said stocks have as much as a 20% upside, but one threat looms especially large. If wages accelerate further, then it will pressure the Fed to maintain its aggressive policy. He shared the biggest risk to his bullish 2023 outlook.
7. Sam Bankman-Fried is expected to enter a plea in the FTX fraud case on Tuesday. But odds are, a "sweetheart" deal will remain off the table, according to a former federal prosecutor. She explained why the Justice Department has a strong case.
Edited by Jason Ma in Los Angeles and Hallam Bullock (@hallam_bullock) in London.
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