Year-end Target (SPX) 4500

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Globally, 2023 should be a transitionary year where SPX enjoys a far better year than 2022.
Most weakness could be concentrated in Q2 before sharp rallies into Fall and a stairstepping rally into year-end. Increasingly, it’s right to expect that markets have made their
bear market bottoms last October 2022.

Two Possible Outcomes:

  1. Base Case- Equity markets turn up sharply in 1Q into mid-March, and pullbacks prove brief before further gains in a stair-stepping fashion to end the year up 15%. In this case, despite a mild late Spring bounce in US Dollar and Treasury yields, this proves short-lived, and no meaningful Equity weakness occurs and inflation falls off steadily all year. The US likely avoids recession in 2023 – YE target 4500
  2. Equity markets falter between March and June and then again in Fall 2023 before rally back into year-end- a choppier sideways year albeit with rally into year-end helping returns. Inflation stays with markets longer than expected given a sharp rally in Energy commodities and both TNX and DXY move back to highs, albeit briefly in 2023. In this case, it’s still likely SPX gains 5-10% but would be not as linear of a rally

Conclusions

Equity markets likel...

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