The World’s Biggest Banks’ 2023 Economic Predictions

Overall, a bullish outlook [View in browser]( Proprietary Data Insights Top Stock Searches Last Month Rank Name Searches #1 Tesla 1,226,018 #2 Apple 582,773 #3 Eversource Energy 573,457 #4 Amazon.com 416,153 #5 Nvidia 253,596 The Rich Get Less Rich? Investors searched for Tesla (TSLA) stock more than any other ticker in Trackstar, our proprietary sentiment indicator, in 2022. We don’t expect this to change much, if at all, in 2023. In December, TSLA generated 1,226,018 pageviews from 634,227 unique users. That’s 643,245, or 110%, more pageviews and 286,573, or 82%, more users than consistent Trackstar #2 Apple (AAPL). Safe to say, Apple is more popular than CEO Tim Cook (wasn’t the case when Steve Jobs was CEO), but Tesla’s CEO, Elon Musk, is [more popular]( than the company is. Thus the outsized interest in TSLA as the stock continues to crater, down roughly 69% in 2022. Source: Google Finance Over the week of Christmas, TSLA search interest rose 12.5% in Trackstar. Impressive, especially because the weeks around the holidays tend to slow down stock-market-related internet traffic. As Tesla stock continues to drop, Elon Musk gets poorer. Or less rich. But in reality, neither. Last month, he unloaded approximately 22 million TSLA shares for about $3.6 billion. In November, Musk sold 19.5 million shares for just over $4 billion. So Musk’s doing alright, despite TSLA starting 2022 at $400 a share and ending it close to $100. Hard to say it was a tough year for one of the richest people in the world. Easy to say it was for many TSLA investors, who underperformed even an ugly stock market by roughly half. 2023 Outlook 2023’s Biggest Economic Predictions Key Takeaways: - Make sure our email – [TheJuice@news.investingchannel.com](mailto:TheJuice@news.investingchannel.com?utm_source=nl_thejuice&utm_medium=newsletter&utm_campaign=Jan-04) – is in your contacts, because The Juice has big plans for 2023. - As we ease into the new year, we look at what the world’s biggest banks say about the economy and stocks going forward. - Overall, the outlook is bullish for 2024 after an uncertain, if not rocky 2023. Between servings of lasagna, espresso martinis, and shots of mulled wine, The Juice spent some of our holiday scouring the reports big banks send out with 2023 economic and stock market predictions. And to kick off the year, we compiled a list of the most interesting, bold, or otherwise compelling. For the record, The Juice has a big 2023 planned. We’ll double down on our promise to make sense of the economy, so together, we can be better with money and become better investors. We’ll also share more hacks, ideas, and strategies about spending, saving, debt, and other important elements of your personal finances. Plus, in February, we’ll spend some time going back to basics on two areas we expect to get even more popular with investors in 2023 than they were in 2022: ETF and dividend growth investing. Now, let’s sample the sentiment of the fat cats on Wall Street per big bank. Goldman Sachs - The most notable thing Goldman said: It thinks a U.S. recession in 2023 is much less likely than its relatively bearish peers do. [Goldman Sach] Source: Goldman Sachs’ Macro Outlook 2023 - Goldman sees a 35% probability of a 2023 domestic recession versus a median consensus estimate of 65%. Morgan Stanley - This bank also breaks from consensus on the economy, this time as it relates to stocks. - While, in Morgan Stanley’s words, “the consensus view” for 2023 calls for an earnings “collapse” that will bring “the stock market down with them,” MS thinks earnings will “drip down slowly” amid inflation improvements that could help catalyze “a strong first quarter.” - Morgan Stanley is investing in “companies with pricing power and recurring revenues that can grow their earnings steadily,” such as “favorite consumer brands, mission-critical software services and quality-assured health care companies.” Citibank - Citi isn’t quite as bullish as Goldman or Morgan Stanley. - The bank expects a “mild recession” in the U.S. marked by drastically lower spending, unemployment north of 5%, and a subsequent 10% drop in corporate earnings ahead of a 2024 rebound and recovery. - Citi likes dividend stocks with strong balance sheets and bonds in 2023. It anticipates taking on risk and seizing opportunity in late 2023 into 2024. Wells Fargo - Wells Fargo anticipates a U.S. recession in the first half of 2023, followed by a recovery and strengthening rebound during the last six months of the year. - The bank favors domestic large- and mid-cap stocks in defensive and high-quality sectors (IT, healthcare, energy) before turning to more cyclical names as the late-2023 rebound takes shape. BNY Mellon - While BNY Mellon puts the probability of a global recession at 70%, it expects it to be “mild and short-lived.” - The best three sentences from all 20 or so reports we read came from this BNY outlook: “History tells us that markets can rebound before a recovery in the real economy. These rallies are very hard to pinpoint and can happen quickly, making it critically important to stay invested. It’s likely to be a challenging investment landscape, but one that will undoubtedly present opportunities.” (Emphasis added.) The Bottom Line: Opportunity. No matter the bank’s outlook for 2023, the word “opportunity” appeared – often multiple times – in every report we read. The banks that expect a recession in 2023 almost unanimously expect it to be significantly worse in Europe than in the U.S. And any domestic contraction isn’t a reason to panic. In fact, it presents meaningful opportunity. The Juice’s takeaway: If you’re a long-term investor, stay the course. As 2023 takes shape, look at beaten-down sectors you like and start nibbling as you see signs of a macroeconomic recovery and renewed strength in the stock market. Even if this rebound comes slower or choppier than these Wall Street firms predict, time is on your side. While it might feel scary at times, putting money into stocks in 2023 could pay dividends – literally and figuratively – for years, if not decades, to come, particularly for patient and astute investors. 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