Next year’s stock market ‘Don’t invest in predictions, huge changes are coming’

Global investment bank strategists diagnosed that “don’t invest in forecasts, drastic changes will come” in the outlook for next year’s economic downturn, and service inflation and wage hikes were pointed out as the biggest variables.
The New York Times said of investing next year, “Accept that you have to invest without knowing what will happen to your money in the short term, and first set aside enough money in a safe place, such as a bank account or money market fund, so that you can pay your bills in the coming months. “There is no doubt that in 2023 there will be tremendous changes that are not yet seen. "Inflation and interest rates dominate financial markets right now, but there's no guarantee that will be the case a year from now," he said on the 18th.
“Guessing or betting wildly is not a prudent solution,” reads an article by business editor Jeff Somer. “This strategy has been painful this year, but it has paid off over a long period of time,” he advised.
"Wall Street didn't know that Vladimir Putin ordered an invasion of Ukraine this year or that fossil fuel companies would lead the stock market in 2022," he said. will affect But how exactly? We can guess, but anyone who claims to know is delusional.”

In the Spectrem Group's "Millionaire Survey" of 761 Americans with investment assets of $1 million or more, 56% said that the S&P 500 index would decline by 10% in the stock market next year, and a sharp decline of 15% or more reached a third, CNBC reported. day reported.

The S&P 500 is down 18% this year.

Regarding the diagnosis that next year's inflation will be stronger in the service, the Associated Press said, "The fight against inflation is hardly over. Some economists worry that a continued shortage of workers, particularly in labor-dependent service businesses, will keep upward pressure on wages and prices. "Inflation is shifting from goods to services and is generally more intractable. According to the Fed's preferred inflation measure (the government's personal consumption expenditures price index), service prices rose 0.4% in October and 0.6% in September and August."
The simplest and most classic investment strategy, the Vanguard Balanced Fund — a diversified portfolio of broad stock and bond index funds, 60% allocated to stocks and 40% to bonds, lost nearly 14% this year in 2022. wore
Regarding the economic turmoil, the Washington Post said, “Inflation has emerged as a dominant theme and has engulfed millions of businesses and households. These high prices have popped up everywhere, but haven't dragged the country into a recession, at least not yet. “It is important to shed light on how labor markets can demonstrate resilience and prevent inflation from dragging the economy into recession. That labor market is now under new pressure,” he pointed to the labor market in next year's economy.
“In the summer, when a recession seemed imminent, the labor market continued to rotate and employers kept hiring hundreds of thousands each month, so unemployment was extremely low (3.5%), so consumers had enough income and the 'spending' that economists feared Regarding the issue of next year's unemployment, he said, "Large layoffs have begun in the past few weeks, mostly in the tech sector. If this spreads from the tech sector to other parts of the economy, it could be the last domino in a recession,” he diagnosed on the 14th.
The WP said on the 19th, “The minimum salary that American workers will accept for a new job rose to nearly $73,700 in November, the highest the Federal Reserve Bank of New York has recorded since data recorded in 2014.” Measures of wage pressure (surveyed every four months) face the biggest barrier in suppressing inflation in the economy.”
Morgan Stanley said the S&P 500 could fall to a range between 3,000 and 3,300 in the third quarter of the first quarter of next year, saying higher wage costs will squeeze profits after companies offer worker raises.
The Associated Press said of Morgan Stanley's projected index, "This means that it will lose up to a quarter of its value at the closing price level on the 19th, and this low is also 37.5% lower than the record set at the beginning of 2022." "The reason for the bank's pessimism is Strategists are feeling the pressure as manufacturing and other sectors of the economy weaken in terms of corporate earnings far weaker than the rest of Wall Street.”
Goldman Sachs predicts a low of 3,600 in the first half if a recession next year is avoided, which is a drop of almost 10% from the closing price on the 19th.
In the event of a contraction in the economy, Goldman Sachs said the S&P 500 could fall to 3,100.
Strategists at Deutsche Bank predict that the US economy will enter a recession in the second half of 2023, and that the S&P 500 could sink to 3,250 before bottoming out halfway through the recession, which will last for the final six months.
The Mizuho Bank report (by Tan Boon Heng) said, “Last week on the 16th, the Fed fell after it released its forecast on how long interest rates would need to rise to cool inflation near its four-year high, while the European Central Bank (ECB) fell more. "This 'hawkish rhetoric' suggests that the pipeline risk of a global recession is increasing."
“Then, the S&P 500 could end the year high as high as 4,500 if stocks follow the typical playbook for a recession,” Deutsche Bank strategist Binky Chadha told the Associated Press on the 19th of next year's downturn. 

Bank of Korea President Lee Chang-yong said on the 20th, "As we predicted that next year's economy will be very difficult, especially in the first half, the question of whether or not it will go into a recession is on the borderline."
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