The global stock market losses amounted to regarding $ 18 trillion in 2022, according to Bloomberg. Investors are awaiting the year 2023 with great caution. Will the financial markets reap some gains, or will the markets continue to bleed and fall to new lows, whether in stock exchanges or cryptocurrencies?
According to to report Goldman Sachs, 2022 is likely to end as the sixth most volatile year since the Great Depression of the 1930s.
A rough 2022 for the market came following one of the most booming periods ever for stocks, as the Dow Jones index rose nearly 90% from its March 2020 low through last December.
Then inflation hit a 4-decade high, prompting the Federal Reserve to raise interest levels in an effort to slow the economy.
The Dow Jones, the Standard & Poor’s 500, and the Nasdaq are on their way to achieving the worst annual return since 2008.
Since the beginning of the year, the Dow Jones Industrial Average fell 8.58%, while the “Standard & Poor’s 500” index fell 19.24%, and the Nasdaq Heavy Technology fell 33.03%, according to Bloomberg data.
With the rate hike, high-value technology stocks have suffered greatly, as companies such as Tesla have lost regarding two-thirds of their value, while shares of Amazon, Netflix and Meta have fallen by 50% or more since the beginning of the year.
Wall Street investment experts warn that the beginning of 2023 will be very difficult for stocks, as the US Federal Reserve enters the final stages of its battle once morest inflation.
According to the average forecast of 22 strategists polled by “Bloomberg” for their opinions, the “Standard & Poor’s 500” index may end next year at 4078 points (regarding 7% higher than current levels).
The most optimistic forecast is for an increase of 24%, while the bear market sees a decline of 11%. In Europe, a similar survey of 14 strategists predicted an average gain of regarding 5% for the Stoxx 600 index.
This cautious case among experts reflects the magnitude of the challenges posed by several factors, from monetary tightening, to the war in Ukraine, to the energy crisis in Europe. Monetary tightening has already helped restrain the recent rally in equity indices.
in a a report Published by the “JP Morgan” website, the team of researchers expects the “Standard & Poor’s 500” index to decline towards the declines it witnessed in 2022, before the US Federal Reserve’s guidance supports a recovery in the second half that keeps it approximately 10% higher than its current levels. In its worst phase this year, the index fell in October by 25% and reached 3,577 points.
Those who take an optimistic view can point to the resilience of the US economy, the slow pace of interest rate increases, as well as the reopening of China (for its economic activities) following strict closures due to Covid.
