The path of markets this year hinges on economic growth, corporate profitability, and — most importantly — whether inflation abates and the Fed can stop raising interest rates.
The path of markets this year hinges, as always, on economic growth, corporate profitability, and — most importantly — whether inflation abates and the Fed can stop raising interest rates.It was exactly a year ago — Jan. 3, 2022 — when the S&P 500 topped out, hitting a record closing high of nearly 4,800.
Then a series of overheated inflation readings prompted the Fed to jack up rates at the fastest clip since the late 1970s, clobbering the stock and bond markets.The key question in 2023 is whether efforts to rein in inflation push the economy into a downturn.Some well-respected analysts think that's a distinct possibility, which suggests more tough sledding to come.
"We continue to think that the near-term path for equity markets is likely to be volatile and down before reaching a final trough in 2023," Goldman Sachs analysts wrote in a recent note. Over at JPMorgan, analysts wrote: "As we approach 2023, we see a growing recession risk. In fact, our view is that market and economic weakness may occur in 2023 as a result of central bank overtightening."Of course, Wall Street analysts can't tell the future. Here are some of the key issues that will determine the trajectory of the economy and stocks over the next year.This is the mother of all issues. Most seem to think U.S.
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