How good is your intuition?
We’ll know in 12 months or so, when we assess the accuracy of predictions that more than 6,000 Yahoo Finance readers made for 2023. We asked for those forecasts in an online survey we ran on Dec. 22 and 23.
For now, however, our respondents provided some intriguing ideas about who will make and lose money in 2023, and what might be different by the end of next year. Overall, the Yahoo Finance audience is fairly optimistic. The median forecast for the S&P 500 (^GSPC) stock index is 4,000 by the end of next year, which would be a 5% gain from current levels (and not another wipeout like 2022 brought). The median forecast for the Nasdaq (^IXIC) index is 11,000, which would be a 6.2% gain. The median outlook for inflation 12 months from now is 4.3%, which would be nearly three points lower than the current level, and welcome news at the Federal Reserve.
Nearly 70% of respondents think there will be a recession in 2023, with just 17% saying there won’t be. But in an open-ended question asking about possible surprises in 2023, many poll-takers said they expected a mild and short downturn.
We got 3,774 answers to the question about business or economic surprises, which had no prompts and let respondents write whatever they wanted to. So we can’t quantify those responses. But content analysis reveals several recurring themes, and the word cloud below gives some idea of what’s most on investors’ minds as the new year begins. Here are 11 things Yahoo Finance readers predict for 2023:
A happy ending. Many investors using Yahoo Finance think that by the second half of 2023, a mild recession will be nearly over, inflation will be under control and the stock market will be rebounding. Sample reader prediction: “Market rebound in the second half of next year and surpassing previous highs.”
Related prediction: The unemployment rate rises from 3.7% now to around 5%.
The war in Ukraine ends. The word “war” appeared 256 times amid the 3,774 responses, more than any other significant word. Russia is giving no hints that it plans to give up on its quest to annex parts of its neighbor to the west, but Ukraine clearly has momentum and Russian forces seem exhausted, suggesting a Russian withdrawal might be possible within the next 12 months. Sample prediction: “Russian withdrawal from Ukraine at the end of the year causes the market to surge.”
Related: Russia uses a nuclear weapon; NATO and the United States get drawn directly into the war; Russian President Vladimir Putin falls; Russia collapses.
Gasoline prices surge again as China reopens. This is very plausible, given that the huge COVID-related slowdown in China this year reduced Chinese demand for energy and helped bring global prices down. China is now lifting strict COVID restrictions and trying to get back to normal. Sample prediction: “Gas prices will move back towards $4 after China fully reopens.”
Related: China finds it can’t fully reopen and remains in a kind of economic limbo.
Kamala Harris assumes the presidency. Some respondents think President Biden will die in office or suffer a serious illness forcing him to resign. We didn't detect unusual ill will toward Biden in these responses, but they do seem to reflect concerns that the 80-year-old president is too old for one of the world’s most demanding jobs. Sample prediction: “Biden health crisis.”
Related: Neither Biden nor Trump mount competitive 2024 presidential campaigns
[Follow Rick Newman on Twitter, sign up for his newsletter or sound off.]
Used car prices plunge. This is also plausible, given that the surge in prices in the first half of 2022 could easily reverse in the first half of 2023, especially with rapidly rising rates on auto loans. The Manheim used-car value index is already 14% below its peak from January 2022 and could fall another 20% to get back to normal levels. Sample prediction: “Used-car market collapse.”
Related: There’s also a glut of new vehicles by year end.
The electric-vehicle revolution stalls. Tesla’s (TSLA) stock price is down 73% from its 2021 peak. EV startups such as Lucid (LCID) and Rivian (RIVN) are struggling. Some Yahoo Finance users think these are signs that buyers are starting to think twice about the higher cost, limited range and recharging complexities of EVs. Sample prediction: “Electric cars will not be the future as everyone thinks.”
Related: Apple (AAPL) finally introduces the iCar, its first entry into the automotive market.
Big Tech makes a comeback. The Nasdaq tech-stock index, down 30%, has fared worse than the broader market in 2022. Some think tech giants such as Apple and Microsoft (MSFT) will no longer be the market’s top dogs. But others think Big Tech will come roaring back once inflation and interest rates stabilize. Sample prediction: “Tech stocks will soar.”
Related: Beaten-down Chinese tech stocks will outperform their U.S. rivals.
The metaverse finally catches on. Meta (META) CEO Mark Zuckerberg staked his company’s future on the widespread adoption of the metaverse, where virtual reality somehow enhances the traditional experience of the internet. It didn’t happen in 2022, and Meta’s stock endured a 65% wipeout. But Meta is still standing and maybe Zuck was just a year or two early. Sample prediction: “Collapse of social media and the rise of its replacement, the metaverse.”
Related: Resurgence of Meta’s stock price; Zuckerberg steps down as CEO
Other big winners: Green energy, 3-D printed houses, shipping. Whether it solves the problem of global warming or not, green energy is likely to generate sizable returns because of the huge federal investments included in the 2022 Inflation Reduction Act. The new trend of 3-D printed homes seem like a looming solution to the nation’s housing shortage. Shipping will surge as consumer demand for goods begins to grow again in the second half of 2023. Sample prediction: “Shipping will surprise all forecasters.”
Related: Battery metals such as lithium, cobalt, and nickel could rise further if EV demand keeps growing.
Biden’s student-debt relief plan dies. This actually seems more likely than not, since the Supreme Court will decide if Biden can forgive billions in student debt by executive order sometime during the first half of 2023. Many analysts think the court’s conservative majority has the legal basis and political temerity to nullify Biden’s order, dashing the hopes of some 40 million borrowers. Sample prediction: “Student debt relief will be ruled unconstitutional by Supreme Court, causing an immediate financial crisis. Borrowers will have to borrow more, sell assets, or greatly reduce budget.”
Related: A personal-debt crisis if interest rates get too high
Donald Trump will form a new political party. He’s losing favor with Republicans, given that many of the candidates he backed in the 2022 midterm elections lost. And Florida Gov. Ron DeSantis seems poised to push Trump aside in the 2024 Republican presidential primaries. Sample prediction: “Trump will leave the Republican Party.”
Related: Trump will go to jail.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman
Click here for politics news related to business and money
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
These snowbirds are heading south for the winter. And staying put.
Profit from folly. Don’t participate in it.
At the World Economic Forum in Davos, the world’s business leaders fretted over the possibility that inflation won’t fall back to central banks’ targets.
California's proposed wealth tax appears to take aim at popular strategies among the wealthy to avoid state taxes.
The government is in a doom spiral of spending and borrowing
DNB Asset Management increased positions in Tesla and Plug Power, while slashing its stake in General Motors in the fourth quarter.
States vary widely in the way they tax retirement income so location is an important consideration in financially planning for retirement. Some states don't levy income states on any sort of retirement income, while others tax IRA and 401(k) distributions, … Continue reading → The post 11 States That Do Not Tax Retirement Income appeared first on SmartAsset Blog.
These best-of-breed names belong to a select group of 48 companies that have raised their dividends for at least 50 consecutive years.
Chinese electric vehicle (EV) maker Nio (NYSE: NIO) and U.S.-based EV charging infrastructure and software company ChargePoint Holdings (NYSE: CHPT) are two companies with growing revenue but troubled stock prices. Nio and ChargePoint saw their valuations surge during their peak in late 2021 — only to be cut down by over 70% from those highs today. Howard Smith (Nio): Nio is in the sweet spot for the growing global EV markets.
Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) CEO Warren Buffett has made millions for his early investors. A $1,000 investment in Berkshire stock in 1965, when Buffett took control of the company, would have grown to more than $36 million in 2021 if the investor remained invested. Among Berkshire's largest holdings, there are a few that stand out for their durable brands and competitive strengths.
For most investors, last year served as a reminder that the stock market doesn't move up in a straight line — even if 2021 made us believe it did. The start of a new year brings with it new opportunity for the iconic Dow Jones Industrial Average (DJINDICES: ^DJI), broad-based S&P 500 (SNPINDEX: ^GSPC), and tech-dependent Nasdaq Composite (NASDAQINDEX: ^IXIC), to break out of their respective bear markets.
Should investors be excited or worried when a stock's 50 -day simple moving average crosses above the 200-day simple moving average?
Can't get rid of U.S. that easily.
These supercharged income stocks, with an average yield of 10.06%, can generate $1,000 in annual income with an initial investment of less than $10,000.
‘Both are insistent that I'm taking money that is morally theirs. There's no changing their mind.’
Bonds and stocks appear to be getting back to their usual relationship, a plus for investors with a classic asset mix in their portfolios amid recession fears.
(Bloomberg) — In a week marked by fresh recession angst from Wall Street to Davos, JPMorgan Chase & Co. finds the odds of an economic downturn priced into financial markets have actually fallen sharply from their 2022 highs. Most Read from BloombergHolmes Belongs in Prison, Not $13,000-a-Month Manor, US SaysMilan Luxury Real Estate Booms as Bankers Leave London for ItalyJPMorgan Model Shows Recession Odds Fall Sharply Across MarketsTrump Not Scared by Judge’s Million-Dollar Smack, Experts SayBe
The boom in special purpose acquisition companies (SPACs) and flurry of initial public offerings (IPOs) in 2020 and 2021 produced a lot of public companies that are starting to run into serious financial trouble in this difficult economic environment. Banking disruptor SoFi Technologies (NASDAQ: SOFI) was a product of the SPAC boom, and like many of its fellow ex-SPACs, its stock has performed poorly — down about 79% from the peak. In addition to the general cooling off of high-growth stocks, investors are frustrated that SoFi's core student loan refinancing business remains at a virtual standstill, and there are worries that higher interest rates could hurt its lending operations, by far the more profitable side of the business.
If you want $10,000 in passive income in 2023, it's possible to do so by investing a total of $110,000 in these high-yield dividend stocks. As a BDC, Ares provides financing to small to medium-sized businesses. The company must return at least 90% of its taxable income to shareholders in the form of dividends.
Many Americans are surprised to see they have not prepared as well as they had hoped for retirement when they finally get ready to call it quits. The bad news is, you’ll probably have to make some realistic assumptions of what your retirement will look like. If you’ve lived primarily paycheck to paycheck in your working years, that may continue to feel the case in your retirement.
How good is your intuition?