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2023 Midyear Market and Financial Outlook: Reducing By the Noise


Nov 1, 2023


For months now, it looks like all we have encountered are unfavorable headlines. However once we reduce via the noise and have a look at the info, the story for the primary half of 2023 was easy: the markets and financial system did higher than many anticipated them to.

Will the identical maintain for the second half of the 12 months? We have a look forward in our Midyear Outlook.

Expectations Vs. Actuality

Regardless of dangers—just like the potential U.S. default on its debt—and worries about an impending recession, hiring remained robust, customers and companies stayed assured, and the financial system grew. Did it develop extra slowly than final 12 months? Certain. Nonetheless, all market indices have been up, company earnings beat expectations, and monetary situations remained regular.

And what about inflation? It managed to tug again, as did longer-term rates of interest. After elevating short-term charges at one of many quickest paces in many years, the Federal Reserve (Fed) adjusted its language in Could to counsel a pause could also be so as. None of this could have occurred had development remained ultimately 12 months’s degree. That slower development ought to assist help the markets and financial system within the second half of the 12 months.

The Street Forward

Whereas the debt ceiling was resolved and not using a disaster, the banking system stays underneath stress. The U.S. relationship with China is rocky, and the battle in Ukraine continues. We have now practically as many dangers now as we did in January. Add in slower development, and there is much less cushion for the financial system and markets to fall again on.

The dangers are actual, however so are the positives. Inflation is down. The Fed could pause. And the worldwide state of affairs, whereas worrying, is not any extra worrying now than it has been for the previous 12 months or so. Mixed with robust job development and shopper confidence, we get an financial system that appears very similar to it did firstly of the 12 months. And that financial system proceeded to outperform. With low expectations, it might effectively achieve this once more.

For extra on our expectations for the U.S. financial system and the fairness and stuck earnings markets, learn our 2023 Midyear Market and Financial Outlook, accessible now.

2023 Midyear Market and Economic Outlook

free obtain

Reducing By the Noise

The headlines inform one story. However does the info inform one other? Obtain our Midyear Outlook to search out out.


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