Last year was a bummer for the stock market, with the S&P 500 down 19%. Economists keep predicting a recession in 2023, although they temper that by saying it likely will be a “mild” one, whatever that means. Of course, recessions are never good for equities. Among their many nasty ramifications, they torpedo earnings, which have a huge bearing on share prices.
But let’s say there is no recession, and the economy achieves what’s called a “soft landing,” where gross domestic product slows but doesn’t turn negative. Odds today are pretty decent that the market can turn in a good year. Investors seem to be an upbeat mood lately. The Nasdaq Composite, which got slammed in 2022 due to its dependence on suddenly shunned tech names, is up 11% this money, its best January since 2001. The S&P 500 is up 6%.
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