Compared to 2000/2008 nowadays information travel so fast to phones and all of data/news in our hands and its a bit crazy to see how market is changing in basically realtime..
We are going from high inflation to recession fear that is slowly coming in 2023.Media is starting to talk about recession much more these days. FED raising rates aren't the problem anymore, its the duration of rates that will stay through most of 2023. We are probably gonna see 25bps increases through Jan/Feb and possibly March that is already priced in, after that they will stop rates around 5% for a few months. Now the big issue that high rates are gonna stay for most 2023 and i dont think pivot is coming before Q3/Q4 2023.Because Jpow already said they don't wanna make same mistakes like in 80' and pivot too soon and risk for inflation to become entrenched.
Their projection for '23 is much higher unemployment and rates around 5.1-5.6, also GDP growth projection is lowered and stands just around 0.5%..
In bear market stocks had ALWAYS bottom on at least 1 of those data.
1.Near unemployment peak
2.After pivot
3.During the recession
6-12 months after 10y 3m treasury are inverted which is most accurate indicator for upcoming recession. Its already heavily inverted for 3 months
None of those happend yet so i do think stocks bottom will happen in 2023(its just my opinion based on data, its not financial advice as i could be wrong).
In a month we're gonna have earnings for Q4 2022. It still might come out decent but i do think starting from Q1 '23 earnings are gonna be destroyed by high interest rates and much less consumer spending.
What is your opinion on something that you agree/don't agree with me?
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