If Tuesday was any indication of how the market will behave this year, then buckle up, it looks like it will be a wild one. The Dow Jones Industrial Average DJIA,
It’s still early enough in the year to look at 2023 predictions, so this time we’ll go with one from an analyst who called the market correctly at the end of 2021. “The S&P 500 will have its worst year since 2008,” said Michael Batnick, director of research at Ritholtz Wealth Management. “I predict this year it will fall more than 15%. The combination of high multiples, high inflation, supply chain issues, and the Fed raising interest rates will prove to be too much for investors to handle.” The S&P 500 SPX,
Of course, not all his predictions came true — for instance, he said the Fed would end up cutting rates by the end of the year — but still that’s a better track record than many. So what does he expect for 2023?
Jeff Bezos, in the style of Bob Iger at Walt Dsiney, will come back to lead Amazon.com AMZN,
That’s not crazy talk, given Amazon’s share-price struggles, though of course Andy Jassy had the unfortunate timing to start as CEO just five months before the first vaccines arrived, releasing consumers from their homes. “Is Amazon in a lousy business or do they do a lousy job running it,” asked Laura Martin, an analyst at Needham, in a late December note forecasting just 2% operating margins for the fiscal year.
Relatedly, Microsoft MSFT,
Batnick more broadly expects the tech sector to continue its layoffs — which he wrote ahead of Salesforce.com CRM,
A few of his other forecasts: bonds will hold their own as a diversifying asset; bitcoin BTCUSD,
Caveat emptor, though. “These are my best guesses as to what happens in the next year, and I look forward to rereading them in twelve months in disbelief that I could be so wrong on so many things,” writes Batnick.
U.S. stock futures ES00,
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It’s a big day on the economics front. The Institute for Supply Management’s manufacturing index is due for release at 10 a.m. Eastern, the same time the latest job openings report comes out.
The minutes from the last Federal Open Market Committee meeting are due to be released at 2 p.m. — keep in mind Chair Jerome Powell was very hawkish after the meeting, so there’s the potential the summary might not match his tone.
In France, inflation in December fell to a three-month low, as energy prices wane in Europe due to a warmer-than-expected winter.
The spectacle of who will become House speaker may continue after Kevin McCarthy saw his bid rejected three times by dissident Republicans.
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The website Unusual Whales has published its 2022 Congressional stock trading report, which finds both Democrats and Republicans enjoyed market-beating returns last year.
The head of Saudi Arabia’s wealth fund has been subpoenaed in a lawsuit over an Elon Musk tweet.
Moody’s warns not of a recession but a ‘slowcession.’
Here were the most active stock-market tickers as of 6 a.m. Eastern.
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Ahead of the Fed minutes, this chart from Fidelity Investments strategist Jurrien Timmer lays out the difference between market and central bank expectations on where rates are headed. “The risk here is that the Fed is correct, and markets are wrong in projecting the path of policy in 2023, and that financial conditions will remain tighter for longer,” he says. He says the recent rally from the mid-October low may not just be justified if rates stay higher for longer than what investors anticipate.
An unhappy jolt in the new year: Goldman Sachs GS,
The man believed to be the world’s tallest is 9 foot 6 inches in height.
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