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Why Investors Can Expect Stock Market Returns in 2023 After Last Year’s Mess

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Have a good day, readers. I’m senior reporter Phil Rosen.

Around this time last year, the S&P 500 had just touched its all-time closing high, which came on the first trading day of 2022. That didn’t exactly happen yesterday.

Stocks showed promise on Tuesday, but by the close they had turned as red as Santa’s suit, continuing December’s sluggishness.

Sure, it’s still early days, but if 2023 doesn’t see a rebound, then history tells us we could have a tougher time than last year.

It’s only happened four times, but when the S&P 500 sees consecutive years losing, the second is always worse.


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NYSE traders

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 2, 2020.

Brendan McDermid/Reuters



1. Stocks come off their worst year since 2008 and a huge macro storm is rocking the markets – but there is no shortage of bullish calls coming from Wall Street.

Oppenheimer chief investment strategist John Stoltzfus said current conditions aren’t as bad as they were in 2008 and stocks have up to 15% upside ahead of them.

“We keep seeing ‘the glass half full’ as the end of a period of ‘free money’ and overstimulation of the economy portends better times,” Stoltzfus wrote in a note Tuesday.”

Remember, the last year brought both skyrocketing inflation and the Fed’s aggressive policy response, as well as lingering pandemic issues and numerous geopolitical tensions with Russia, Ukraine and China.

But Oppenheimer’s strategist pointed out that equities are facing very different headwinds than they encountered during the Great Recession, which could imply that they are doing better.

And if you look at Bank of America’s Sell Side Indicator, a positive year for the S&P 500 seems to be in the cards.

BofA strategists forecast returns of 16% for the index in 2023, and their key contrarian signal is part of that calculation.

It is approaching a “Buy” signal, which may be reason enough to encourage investors.

Historically, when the indicator is at this level or lower, the following 12 months have brought positive returns 95% of the time.

What do you think is the most likely forecast for the S&P 500 by the end of 2023?

A) Up to 5%

B) Up to 15%

C) Down 15%

Tweet me (@philrosenn) or write to me (prosen@insider.com) let me know.


In other news:

sam bankman fried sbf court drawing illustration

A Sam Bankman-Fried, founder and former CEO of cryptocurrency exchange FTX, sits after his extradition from the Bahamas with his attorneys Mark Cohen and Christian Everdell during his arraignment hearing in Manhattan federal court in New York, USA, December 22, 2022 in this courtroom sketch.

Jane Rosenberg/Reuters



2. U.S. stock futures rise early Wednesday, as investors look to Fed minutes and US jobs data to fuel the first major market moves of 2023. Here’s what’s happening in the market right now.

3. On the role: Unifirst, Landec Corp., and many others all report.

4. Morgan Stanley just revamped a list of nine stocks that have beaten the S&P 500 by 18% over time. Even though the market outlook for 2023 remains bleak, the company is seeing big gains for some names. See their full list here.

5. Sam Bankman-Fried has asked a judge to keep the identities of two people who helped secure his $250 million bond secret. Lawyers for the disgraced crypto king argued that there was “no need to publicly release” the names and that it would save the individuals from public scrutiny. Meanwhile, in federal court in New York yesterday, Bankman-Fried pleaded not guilty.

6. Twitter is worth half what it was when Elon Musk bought it, according to Fidelity. The company reduced the book value of its investment in the social media platform by 56% in November. He now assigns a value of $8.64 million to his stake, up from $19.66 million in October.

7. Former New York Fed Chief Bill Dudley Says The Looming Recession Will Stop Before a Full-scale Financial Crisis. According to him, the Fed is still in control and policymakers will be able to ease rates when necessary. Dudley said for this downturn, the central bank will be in the driver’s seat.

8. This married couple owns a portfolio of 47 homes worth $19 million. They explained why the housing market is setting up investors for “significant opportunities” this year – and which markets offer the highest buying potential.

9. Investment journalist Kathleen Elkins has interviewed dozens of millionaires and super savers. After seven years of covering wealthy, savvy investors, Elkins has broken down the top two strategies she plans to employ in 2023 to improve her finances.

Tesla stock price on January 4, 2023

Tesla stock price on January 4, 2023

Markets Insider



10. Tesla stock plunged on the first trading day of 2023. Shares of the electric vehicle maker had lost 65% last year, but that slide continued on Tuesday. Between its fourth-quarter delivery shortfall and production issues in China, explore what’s driving the slump.


Organized by Phil Rosen in Los Angeles. Feedback or tips? Tweeter @philrosenn or email prosen@insider.com

Edited by Jason Ma in Los Angeles and Hallam Bullock (@hallam_bullock) in London.



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