Actionable market insights delivered weekly
What Will Lead in 2023?
What sectors will lead the market higher in 2023? Tech? Financials? Healthcare? Industrials? Tech was the right play for the past decade – with rates anchored at zero and the Fed printing money. That has now changed. Tech will unlikely act as strong as it did… which requires a shift in asset allocation by investors.
Powell’s Single Focus
During 2022 – the market obsessed over one thing – inflation. How high? How fast? And for how long? That concern is now largely behind us… however investor’s gaze is about to pivot from CPI worries to employment (specifically entrenched wage growth). If Powell is to be successful in winning the war against structurally entrenched inflation – he needs to bring wage growth down to 2%. Today that figure remains above 5.0%. That’s going to take time… and is the market potentially caught offside?
Patience
Traders (and investors) are wise to remain patient through this tightening Fed cycle. And whilst it is maturing… there’s still more to go. Here I take a look at recent recessions… and some lessons to draw from. Don’t be in any hurry here – we are likely to be headed lower
Excited About the Opportunity Ahead!
I bring good news and bad news. The good news? We have done a lot of the heavy lifting. The rate rise cycle is maturing. Inflation is falling. And China appears to be re-opening. Now the bad news… rates are not about to repeat what we saw the last decade. And the Fed is sucking out liquidity. What’s more – corporate earnings are about to contract. Put that together – stock prices will likely fall. And that will represent opportunity…