Posted 03 January 2023 - 06:33 AM
Stocks may seem determined to begin 2023 in upbeat fashion after their worst year since 2008, but theres plenty of doom and gloom predicted.
There was no happy new year message from the head of the International Monetary Fund, Kristalina Georgieva. In fact, she said 2023 will be tougher than last year, with one third of the world economy expected to enter recession, on CBSs Face the Nation.
In a sliver of good news, she said the U.S. is the most resilient economy and may avoid a recession, citing the strong labor market. The big banks dont share that optimism, though, with more than two-thirds of economists at 23 large financial institutions predicting a U.S. recession, according to The Wall Street Journal.
Even if a U.S. recession is avoided due to labor market strength, as Georgieva notes, the Federal Reserve is likely to keep interest rates higher for longer in 2023, posing further problems for the economy and the stock market.
Investors wont have to wait long to find out if the strength of the jobs market is holding up. The first trading week of the year will be punctuated by employment data, including Decembers jobs report Friday as well as job openings and private payrolls data earlier in the week.
Minutes from the Feds December meeting are also due to be released Wednesday, offering more clues as to the future path of its aggressive rate-hiking.
While U.S. stocks look set to rise on the first trading day of the year, the early 2023 optimism may not last the week.