Stock Market Outlook 2023: What Our Hosts are Thinking
Stock Market Outlook 2023: What Our Hosts are Thinking
By:Mike Butler
The stock market in 2022 was a wild ride – we saw household-name tech stocks plummet from their highs and energy markets rip to the upside. So we decided to poll tastylive hosts for their takes on 2023:
Check out their answers below and be sure to tune in to tastylive in 2023, every day the market is open!
General Stock Market Outlook for 2023:
I believe the market volatility will come down to a lower level, and the overall equity prices will rise. I will keep focusing on bond products and liquid stocks in the tech sector.
I believe we'll have a choppy, more neutral 2023 so I will be placing more neutral trades - I'll be focusing more on the energy sector and precious metals compared to equities and tech stocks.
For 2023, I see an even bumpier road on the horizon. While the Fed does appear to be slowing down its pace of rate hikes, interest rates are still headed higher, and generally speaking, financial assets drop in value when interest rates rise. EOY 2023 SPY Prediction: $325
The traders’ market continues – I expect realized volatility to be higher than implied in the short term in both directions, ultimately leading to a flat-ish year with those in the green making money on short term trading opportunities.
Who cares about my opinion, instead use the price of the next December S&P 500 options to determine where prices are expected to fall. With the S&P 500 currently around 3850, there is a 20% probability that the market will rise above 4600, and a 20% probability that prices will fall below 3000. Double those probabilities to roughly 40% probability that prices will “touch” either 4600 or 3000 at any time up to the end of next year.
2023: the year of more of the same? This year, I think we’ll continue to see the chop we saw in 2022, and I plan to set myself up accordingly with more small futures trades capitalizing on short term extremes and more options trades if volatility remained heightened. I plan to keep a close eye on short term interest rates, the Dollar, Gold, and some individual tech names.
The crypto market and tech sector have experienced serious deflation in 2022. To name some examples, the prices of Bitcoin (/BTC) and Meta (META) declined by more than 60%, Telsa (TSLA) by nearly 70% and Amazon (AMZN) by 50%. Conversely, the energy sector (XLE) has grown by over 50% and the oil and gas exploration sector (XOP) by over 30%. Many of these trends appeared to be the result of events that shocked markets specific to 2022, namely the multiple crypto controversies beginning with the crash of Luna/UST, the turbulent rebound from economies fully reopening, and the onset of the war in Ukraine. My outlook, which should be taken with a very large grain of salt, is that many of these trends will begin to reverse in 2023 when markets have had more time to adjust.
Most Bullish Stance for 2023:
I am slightly bullish on both equities and bond products. Liquid tech companies like AMZN, GOOGL, U, and NVDA are at the top of my list.
I am bullish on the precious metals space in 2023 - specifically gold and silver products, with continued inflation and elevated interest rates on the horizon.
I am most bullish on the consumer staples sector. Anything considered “safe” and a necessity. Boring stocks. COST, TGT, DG, PG, WMT.
I think the “value” idea is far past played out – I’d much rather play the asymmetrical upside of a highly volatile underlying like TSLA or bitcoin vs collecting dividends.
While I'm not a crazy fan of picking direction long term, I’d like to see a bounce in some of the beat-up major tech names like AAPL, AMZN, and GOOG. And given the inverse relationship between bonds and rates, I am hoping to see a bit of a bounce in the treasury futures as well.
Most bullish stance for 2023 is definitely bonds - as I feel the correlation between stocks and bonds will indeed break, and bonds will resume their more traditional risk-off classification
I have a cautiously bullish outlook for the crypto and tech sectors (and tech-heavy markets like QQQ).
Most Bearish Stance for 2023:
With the sell-off we realized in 2022, I will be very cautious about selling anything, even if the market keeps going down.
While I'm not too bearish on any particular product, I will still focus on hedging my portfolio with bearish positions in the ETF space using products like SPY and QQQ.
I’m most bearish on meme stocks, fashion stocks, Chinese stocks, and other international stocks.
Most bearish stance for 2023 is probably oil - if the economy falters next year, we do head into any kind of a recession, even if only mild, demand for oil could easily drop, as there is far less need for oil, given drop in demand from recessionary pressures.
Anything alternative energy – yeah, we need it in the long run but if you think a recession is on the way, lower gas prices, less money splashing around and with a consumer squeezed by inflation – there is no way tech/energy stocks like ENPH or FSLR continue this run.
I'm with Kai. I’m not looking to add a ton of short delta to my portfolio for the long haul, but if I had to choose, I’d be interested in selling some Crude if it gets above $90/barrel and Gold above $1,950.
I have a bearish outlook across the energy sector (XLE/XOP).
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.