Here's why investors can expect returns in the S&P 500 this year after 2022's stock market bloodbath.

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Here's why investors can expect returns in the S&P 500 this year after 2022's stock market bloodbath.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., March 2, 2020.Brendan McDermid/Reuters

Happy hump day, readers. I'm senior reporter Phil Rosen.

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This time last year, the S&P 500 was coming off its all-time closing high, which had arrived on 2022's first day of trading. That didn't exactly happen yesterday.

Stocks showed early promise Tuesday, but by the close they had turned as red as Santa's garb, carrying on December's sluggishness.

Of course it's still early, but if 2023 doesn't see a rebound, then history tells us that we could be in for more pain than last year.

It's only happened four times, but when the S&P 500 sees back-to-back losing years, the second is always worse.

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1. Stocks are coming off their worst year since 2008 and a massive macro storm is rocking markets — but there's no shortage of bullish calls coming out of Wall Street.

To Oppenheimer chief investment strategist John Stoltzfus, current conditions aren't as bad as they were in 2008 and stocks have as much as a 15% upside ahead.

"We continue to see 'the glass half full' as the end of a period of 'free money' and overstimulation of the economy suggest better times ahead," Stoltzfus wrote in a note on Tuesday. "Indeed 2022 was the S&P 500's worst year since 2008 but stemming from a very different underlying cause."

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Remember, last year brought both blistering inflation and the Fed's aggressive policy response, as well as lingering pandemic snags and plenty of geopolitical tensions with Russia, Ukraine, and China.

But the Oppenheimer strategist highlighted that stocks are facing much different headwinds than they did during the Great Recession, which could imply they fare better.

And if you look at Bank of America's Sell Side Indicator, a year in the green for the S&P 500 seems to be in the cards.

BofA strategists are forecasting 16% returns for the index in 2023, and their key contrarian signal is part of that calculus.

It's inching toward a "Buy" signal, which may just be reason enough for investors to cheer.

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Historically, when the indicator's at this level or lower, the subsequent 12 months have brought positive returns 95% of the time.

What do you think is the most likely forecast for the S&P 500 by the end of 2023?

A) Up 5%

B) Up 15%

C) Down 15%

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Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.


In other news:

Here's why investors can expect returns in the S&P 500 this year after 2022's stock market bloodbath.
A Sam Bankman-Fried, founder and former CEO of crypto currency exchange FTX, sits after his extradition from The Bahamas with his attoneys Mark Cohen and Christian Everdell at his arraignment hearing in Manhattan federal court in New York City, U.S., December 22, 2022 in this courtroom sketch.Jane Rosenberg/Reuters

2. US stock futures rise early Wednesday, as investors look to the Fed minutes and US jobs data to fuel the first major market moves of 2023. Here's what's happening in the market now.

3. On the docket: Unifirst, Landec Corp., and more, all reporting.

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4. Morgan Stanley just revamped a nine-stock list that's beaten the S&P 500 by 18% over time. Even as the market outlook for 2023 remains gloomy, the firm sees big gains for certain names. See their full list here.

5. Sam Bankman-Fried asked a judge to keep secret the identities of two people who helped secure his $250 million bail. The disgraced crypto king's lawyers argued there was "no need for public disclosure" of names, and that it would save the individuals from public scrutiny. Meanwhile, in New York federal court yesterday, Bankman-Fried entered a plea of not guilty.

6. Twitter is worth half as much as it was when Elon Musk bought it, according to Fidelity. The firm cut the carrying value of its investment in the social media platform by 56% in November. It now assigns a value of $8.64 million to its stake — down from $19.66 million in October.

7. Ex-New York Fed chief Bill Dudley said the looming recession will stop short of a full-blown financial crisis. In his view, the Fed is still in control, and policymakers will be able to ease rates when it becomes necessary. Dudley said for this downturn, the central bank will be in the driver's seat.

8. This married couple has a 47-unit real estate portfolio worth $19 million. They explained why the housing market is setting up investors for "significant opportunities" this year — and which markets offer the highest upside for buying.

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9. Senior investing reporter Kathleen Elkins has interviewed dozens of self-made millionaires and super savers. After seven years of covering wealthy and savvy investors, Elkins broke down the best two strategies she plans to employ in 2023 to improve her finances.

Here's why investors can expect returns in the S&P 500 this year after 2022's stock market bloodbath.
Tesla stock price on January 4, 2023Markets Insider

10. Tesla stock plunged on 2023's first day of trading. Shares of the electric-vehicle maker had lost 65% last year, but that fall continued on Tuesday. Between its fourth-quarter deliveries shortfall and production snags in China, dig into what's driving the collapse.


Curated by Phil Rosen in Los Angeles. Feedback or tips? Tweet @philrosenn or email prosen@insider.com

Edited by Jason Ma in Los Angeles and Hallam Bullock (@hallam_bullock) in London.

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