Historical data shows there is a high chance that the U.S. stock market may record a return of 20% or more this year after the three major indexes closed 2022 with their worst annual losses since 2008, according to Fundstrat Global Advisors.
Fundstrat’s head of research Tom Lee said stock-market investors are more likely to see a year of positive returns than a flat year after stocks performed badly in the previous year. Moreover, these probabilities are far higher than compared to typical years. In all 73 years since 1950, there is only a 27% chance for the S&P 500 to finish with an over 20% gain, compared to 53% odds in post-negative years.
However, Lee thinks the upcoming CPI report could see core CPI rise as low as 0.1% in December, which would represent a significant decline in the pace of inflation and put the three-month seasonally adjusted annualized rate at around 2%. “In our view, this would be a massive positive surprise,” said Lee.
The employment report on Friday showed wage growth was less than expected in December in a sign that inflation pressure could be easing. Average hourly earnings rose 0.3% for the month and increased 4.6% from a year ago, slightly less than expected and down from 0.4% a month earlier. Equity and bond volatility to fall sharply Equity and bond market volatility is likely to fall sharply in 2023, in response to a fall in inflation and a consequently less hawkish Fed, said Lee and his team. “Our analysis shows this drop in VIX is a huge influential factor in equity gains, which would further support over 20% gains in stocks.”
Ok whatever you say
Not with this President. He’s absolutely horrible at his job unless his job is to funnel corrupt money to those who block for him. Speaking of…. How’s that side hustle going for you ?
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