The S&P 500 trading at 17-18 times earnings by late 2023 — about 5.5% higher from today's level — seems quite realistic.
Looking ahead to second-quarter reports, analysts are calling for S&P 500 earnings to fall 6.4% compared to a year ago. Fortunately, analysts are projecting S&P 500 earnings growth will rebound back into positive territory in the second half of 2023.
The Nifty 50 index was forecast to gain 4.6% from Tuesday's close to 19,200 by end-2023 and 19,600 by mid-2024. Over 70% of analysts, 20 of 27, who answered an extra question said Indian stocks would trade in a narrow range over the next three months.
Morningstar also points out that the RBA's central forecast is for growth around 1.5% in 2023 and 2024, which would be more than a 50% decline from 2022's growth rate. A slower growth rate obviously has implications on spending and corporate earnings.
After dropping more than 18% in 2022, the S&P 500 is now up around 6% year to date (as of May 4), leading some investors to wonder if it's safe to invest now. The short answer is "yes." The longer answer is, "yes, you should be investing regardless of market movements, if you have the means."
The stock market is poised for a strong rally in 2024 as corporate earnings impress and trillions of dollars of sidelined cash gets invested, according to a Monday note from Bank of America.
Publicly traded companies continue to see a slide in revenues in the second quarter of 2023. The larger question is how long it will take for earnings to recover. FactSet Research Systems estimates that S&P 500 second-quarter earnings will decline by 6.3%, and revenue will fall by 0.4%.
Stocks have continued their rebound into 2023, delivering one of the best openings to a calendar year since January 2000. The buoyant mood intensified last week following the Federal Reserve's widely expected quarter-point interest rate hike.
CommSec has released its forecasts for this year. Economists at CommSec have predicted that the Australian share market could rise by up to 7 per cent over the coming year, rebounding from the falls suffered in 2022.
Citi tips ASX 200 shares to gain in 2023
Citi has reportedly upgraded Australian shares to neutral and tipped the ASX 200 to reach 7,400 points by December 2023. The outlook is based on earnings' expectations at a price-to-earnings (P/E) ratio of 14, The Australian reports.
“The bear [market] is almost over, and a new exciting bull market awaits in the second half of 2023,” he said, pointing to potential in technology stocks in particular.
Once you cash out a stock that's dropped in price, you move from a paper loss to an actual loss. Cash doesn't grow in value; in fact, inflation erodes its purchasing power over time. Cashing out after the market tanks means that you bought high and are selling low—the world's worst investment strategy.
For the rest of 2023, investors should consider some safe stock winners like Walmart (NYSE:WMT), Home Depot (NYSE:HD) and O'Reilly Automotive (NASDAQ:ORLY). Today, these stocks still have substantial competitive advantages and unique business characteristics likely to support outperformance in this cycle.
Wall Street analysts expect companies in the S&P 500 to boost earnings by 1.5% in 2023, according to Refinitiv. “In a plain-vanilla recession, earnings go down 20%. We've never had a recession where earnings were up at all,” Rosenberg told MarketWatch, calling this year's forecasts a “glaring anomaly.”
He's forecasting international shares will return around 7% this year, so Australian stocks will certainly end up much higher by the end of 2023. “The anticipation of stronger growth in 2024 and improved valuations should make for better returns in 2023.”
The Australia Stock Market Index (AU200) is expected to trade at 6960.82 points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 6497.14 in 12 months time.
The ASX lost value in response to the crisis, with IPH—which revealed it had been the subject of a data breach—and Fletcher Building leading the losses at 10.61% and 7.38% respectively. Over the last five days, the ASX index has lost 4.73%.
In a nutshell, nobody knows when the stock market will recover and start reaching new all-time highs. It could happen in a year or so if things go very well economically, or it could take several years. After the dot-com crash, it took some solid companies a long time to get back to where they were.
10-Year Stock Market Forecast Based on Historical Returns
We should expect over the long term an average 6.2% gain. But 66% of the time, we should expect an average gain of 16.54%.
One of the main benefits of a long-term investment approach is money. Keeping your stocks in your portfolio longer is more cost-effective than regular buying and selling because the longer you hold your investments, the fewer fees you have to pay.
The most common reason is that the economy is slowing down, and investors are worried they won't be able to make money in the future. Other reasons include political uncertainty, inflation, rising interest rates, and unexpected events (like the pandemic).
2008 Crash
Investors panicked when the Senate voted against the bailout bill. Without government intervention, other banks would follow Lehman Brothers into bankruptcy. The Dow lost more than 50% of its value between its 2007 peak and its bottom in March 2008, The Dow fell 680 points on December 1, 2008.