Indicators lining up for a strong first-half rally in 2023

INDICATORS are falling into place for next year’s outlook, but not in the way investors are anticipating.

In three decades of monitoring financial markets, this is the first time I have seen forecasters being overwhelmingly bearish on next year’s outlook. The average forecast calls for a decline in the stock market in 2023. Historically economists have been pervasively bullish, even in years before major bear markets like 2000-2001 and 2007. Bank of America and Morgan Stanley predict stock markets could fall by more than 20 per cent, extending this year’s decline.

This is in stark contrast to the universally bullish views for 2022 that were penned a year ago. The forecasters were wrong last year, and there’s a good chance of being wrong this year as well.