
Potential market trends for 2023 - from earnings compression to Fed Pivot, AI as the next bubble and the oil market bull run. 🔴 𝗦𝘁𝗮𝗿𝘁 𝗜𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗜𝗕𝗞𝗥 ➡️ https://www.interactivebrokers.com/mkt/?src=ziety5&url=%2Fen%2Findex.php%3Ff%3D1338
🔴 𝗦𝘁𝗮𝗿𝘁 𝗜𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗜𝗕𝗞𝗥 ➡️ https://www.interactivebrokers.com/mkt/?src=ziety5&url=%2Fen%2Findex.php%3Ff%3D1338
🟠 𝗦𝘁𝗮𝗿𝘁 𝗜𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗺𝗼𝗼𝗺𝗼𝗼 ➡️ https://j.moomoo.com/00kT1U
⬇️ Timestamps:
0:00 → Introduction
0:45 → Earnings Compression
3:29 → Fed Pivot
6:30 → Artificial Intelligence - The Next Bubble
8:31 → Oil Market Bull Run
10:41 → Summary of Key Things to Look Out For
12:16 → Analysts’ S&P500 Outlook (2023)
Earlier in Dec 2022, J.P.Morgan cut its 2023 earnings forecast for S&P 500 companies, citing weaker demand and pricing power, margin compression, and limited buy-backs. JPM strategists now estimate S&P 500 earnings per share for 2023 to be $205, down 9% from an earlier forecast of $225. They also flagged that the S&P 500 index could "re-test" this year's low of 3,491.58 in the first six months of 2023, as the U.S. Federal Reserve's monetary policy tightening weakens fundamentals.
On the other hand, the Federal Reserve will hike interest rates to as high as 5.1% in 2023 before the central bank ends its fight against runaway inflation, according to its median forecast released on 14 Dec 2022. The expected “terminal rate” of 5.1% is equivalent to a target range of 5%-5.25%. The series of rate hikes is expected to slow down the economy. The Summary of Economic Projections from the Fed showed the central bank expected a GDP gain of 0.5% for 2023, barely above what would be considered a recession.
A recently published report has suggested that the Artificial Intelligence (AI) bubble is due to burst after several years of sustained hype has generated unrealistic expectations that cannot be met and excessive investments that cannot possibly be paid back. A key message in the report from Riot Research finds the AI market will only reach $39bn globally by the end of 2023, considerably less than most previous forecasts. The shortfall is explained by the fact that in some sectors, AI will flop dismally over the forecast period, while thriving in others.
Oil prices might be down, but several catalysts could push crude higher in 2023. Oil prices rallied from less than $80 a barrel to more than $125 a barrel following Russia's invasion of Ukraine earlier in 2022. However, crude has cooled off considerably since this summer, steadily falling back into the low $80s on macroeconomic concerns. That more than 20% plunge in crude oil prices means oil is in a bear market. However, a new bull market for oil looks to be coming next year. For example, Jeff Currie, the global head of commodities for venerable investment bank Goldman Sachs, has a $110 forecast for Brent oil (the global benchmark price) in 2023. Morgan Stanley also agrees, expecting Brent to top the $110 a-barrel mark by the middle of next year. While others aren't quite as bullish, the consensus is that oil prices will rebound in 2023.
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Disclaimer: The content on this channel is for educational purposes only and merely cites my own personal opinions. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary