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now that we’re nearing the end of the year…
2022 was a rough year for the markets and the economy at large to say the least. we had to constantly re-adjust and question our portfolio. today we’ll take a look at goldman sachs' latest external release on its 2023 macro outlook!
the quick summary
"expect global growth of just 1.8% in 2023"
“fed hiking another 125bp to a peak of 5-5.25%”
no rate cuts expected in ‘23
us will narrowly miss recession, but euro and uk will probably be in recession
real income hit from surging energy bills
expect only a mild downturn
rate hikes expected through may will a 3% european central bank peak
cautious because about china because of the long slide in the property market
us likely to avoid recession
the current bloomberg estimate (consensus of top firms) for the probability of a us recession in 2023 is 65%, while goldman’s at 35%
35% because:
advance gdp report showed 2.6% growth in q3 (annualized), nonfarm payrolls grew 261k in oct., 225k initial jobless claims in the week of nov. 5 – nowhere close to recessionary levels
financial conditions drag will "likely diminish" if the fed does not deliver dramatically more tightening
this cycle looks different from previous recessionary cycles
the us labor market overheated post-pandemic, but it wasn't because of excessive employment. it was because of unprecendented job openings that surged in 2020-2021 in recovery mode
long-term inflation remain "well-anchored", relative to the 70s
remember, this is just one report!
💡 something im thinking about
a great application of ai. wonder how accurate/effective it is! (click image)
that's all, folks 🐒
