Key Events: Russia escalated Ukraine attacks
Russia renewed its military offensive while Putin’s New Year’s address expressed increasingly hawkish rhetoric.
Revelers around the world rung in the new year with the least amount of COVID restrictions since the onset of the pandemic. The number of Chinese cases has spiked, however, leading the US to impose new restrictions on travelers from China.
Market Review: Santa brought a lump of coal…
While 2022 will be remembered for its volatility, the final week came and went in relative boredom – and without the hoped-for Santa Claus rally. The S&P 500 finished the week down slightly and most markets reported muted returns, capping off a forgettable year.
Outlook: …and CEOs are predicting another one
Cheaper stock valuations are key reasons for optimism looking into 2023. The corporate earnings supporting those valuations are crucial.
The chart below illustrates that CEO confidence, which has cratered in recent months, has been a strong leading indicator of the trajectory of profits and the economy. Given concerns such as inflation and debt that affect the profit outlook, such low CEO confidence suggests a cautious outlook for stock returns.
While markets often recover after down years, this path is not assured in 2023. We will dig into our outlook and recommendations over the next couple of weeks. In the interim, we encourage a long-term focus on your goals. Revisit your plan, if needed, but don’t get distracted by one piece of data or another.
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Past performance may not be representative of future results. All investments are subject to loss. Forecasts regarding the market or economy are subject to a wide range of possible outcomes. The views presented in this market update may prove to be inaccurate for a variety of factors. These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data. Please contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.