Inflation and rate hikes have been the main issues for the ending 2022.
what for 2023?
- inflation goes throught the stock market: more revenues, more profits
- marginal rate hike has a zero effect on the dcf of the stock prices, even for the “growth stocks”
- nobody expect a deep recession in the further years, so..
Althought fat coupons are good for some defined return investors (insurance, family offices and pension funds..) stock market is going to beat consistently the fixed income markets if profits remain good as expected by major institutional macro economic researchers
this is a clean and hard valuation to find out, since being prudential this year has been a new “mantra” for most asset managers.. it’s part of the “game”
have a nice 2023.. 🙂