#2 Macro & Business Insights
💡 Q4-22 is arrived. What we could expect in 2023?
Hi all, and welcome back to The Macro & Business Insights!
My research will cover the follow points:
How is going to be the end of the year
Why we could have a rise in unemployment rate
Deep recession is arriving
Earnings will be more under pressure
Q4 is arrived and we have to understand how it could go the end of the year for the markets and especially how will be the new year.
Now the indicators are not comfortable, but as bad news arises on the markets, good ones are presents.
When there is bear market on the street, the best opportunities are present, so be happy.
Inflation rate should fall over coming quarters, analysts see a deep recession and the bear market have room to run.
The Fed will follow their way and the unemployment rate is too low yet.
The 2023 earnings are already under pressure and in my view this pressure will growth over the next months.
The world economy was hit by three shocks over the past quarter: a massive drop in Russian gas supplies to Europe, repeated lockdowns in China, and very aggressive policy tightening by Western central banks.
Analysts see a deep recession in Europe starting in the fourth quarter, with the economy shrinking over 1% over calendar year 2023.
The US should have slightly negative growth as Fed hikes and the dollar surge hit the economy. China should have a small bounce, but far below its 5.5% target.
Analysts now expect that economy to grow just 2.6%, almost as tepid as in 2020.
The global economy should grow at just 2.2% in 2023. That is a startling come down from the 6.3% rate in 2021.
Analysts are still bearish on most risk assets, but they feel as if much of the adjustment has already occurred.
Based on macro analysis of six S&P 500 bear markets that led into recessions, this bear might have room to run.
Earnings have typically been deep into a contractionary phase at market bottoms but are just now coming under pressure.
The unemployment rate also historically increased significantly before Equities find a floor.
The unemployment rate has also typically risen significantly in advance of market bottoms.
Value stocks have a history of outperforming growth amid high (4.5% and above) and even moderate (1.1%-4.4%) inflation, based on analysis of data back to 1927.
Recession is a growing risk as the Fed remains laser focused on combating inflation through higher rates, which crimp economic growth. In this scenario, growth stocks typically have a performance edge given their potential to outpace the slow-growing macro environment.
Today’s market is complicated ― it’s full of risks and rewards. We believe active stock selection can add real value here.
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Disclosure
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.