US Stock Market Outlook for Full Year 2023

Uncertainty   #sp500  

Update on 20230131: As I think about how long will the current bull market of #SP500 will last before it peaks and starts to drop due to start of earning recession that is predicted by inverted yield curve, the bullish trifecta signal of #SP500 this year leads me to predict one of these 2 scenarios will play out, both scenarios assumes #SP500 will end this year at about 20% higher than YE 2022:

• earning recession starts pretty soon (within 3 months), but it is shallow and short-lived, #SP500 peaks in 3 months, drops to 3000-3600 level in summer this year, then climb back to 4200+ level by year end.
• earning recession starts about 1 year later, #SP500 bull market will run for entire year 2022 before it peaks early next year.

Prediction as of 20230124: In the year of 2022, US stock market was driven by inflation data and major market turns happened in the range of 10-20th days of months, because government CPI data is released around that time every month. It is expected that inflation data and ensuing Feds rate decision to still be major forces that will move US stock market in the year of 2023, so we need to watch market actions around CPI release dates closely in next couple of months.