What To Expect From 2023. XTB’s Latest Report
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What are the chances for inflation coming down? Could we have an earnings recession? Will we see a true Fed pivot? We address these and many other questions related to investing in 2023 in the latest report developed by XTB analysts.
The past few years on the markets were anything but boring. After the COVID crash of 2020 and the euphoric “everything-rally” of 2021, we had a fairly turbulent 2022 where inflation fears pushed stock prices down and the war in Ukraine sparked volatility on energy markets. Looking at 2023 investors have a mixture of Fed-pivot hopes and recession related fears. In XTB’s latest report, you can find out which 6 stories will be crucial for the markets.
Table of Contents
Inflation In The Year Ahead
Inflation has been the main market theme for a long while and the main reason behind struggles for the majority of asset classes in 2022. The big question investors are facing right now is, will it go down?
US petrol price declined from $5 in June to $3.6 in November, ISM prices paid index averaged 83 points between January 21 and June 22, but was down to 46.6 in November, and used cars prices are down 15% from their peak in January 2022. These are only a few of the indicators showing that the peak of inflation might already be behind us. But how quickly and to what levels will it fall?
Will There Be An Earnings Recession?
Each of the past 10 US economic recessions was accompanied by an earnings recession, however, not every earnings recession was accompanied with an economic recession. Moreover, S&P 500 earnings growth tends to turn negative in the midst of a bear market.
Does this point towards an earnings recession on Wall Street? Earnings growth in the United States has already begun to slow, but has not yet fallen into a negative territory. As inflation in the United States continued to accelerate above the Fed’s target, the US central bank undertook an aggressive tightening in an attempt to rein in price growth. Leading indicators that proved reliable, like for example ISM manufacturing, suggest that softness in earnings may continue in 2023 as well.
Further insights into investing in 2023, including the war in Ukraine, a potential Fed pivot, OIL and NATGAS prices and China’s real estate bubble, can be found in the complete report. Open a demo account with XTB below, and receive the free ebook to your email.
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XTB Group consists of companies with one of the largest stock exchange-listed FX & CFD brokers in the world. XTB Group has entities regulated by the world’s biggest supervision authorities including the FCA, CySEC and KNF. With more than 15 years of experience, XTB Group provides retail traders instant access to hundreds of global markets. XTB is a fintech company based on trust, technology and support. Since 2002, XTB Group has expanded to 13 major markets in Europe, Latin America and Asia, attracting over 581,000 clients. Operating the company’s own award-winning xStation platform and XTB Mobile app, the entities of XTB Group offer over 1,500 instruments, including forex, indices, commodities, stock and ETF CFDs. Through X-Open Hub, XTB provides leading technologies for financial institutions from around the world. Find out more at XTB.
