According to Goldman Sachs, it’s all downhill from here for the stock market. David Kostin, Goldman Sachs’ chief U.S. equity strategist, warns that even if we avoid a recession, earnings are “unlikely to grow substantially in 2023.” He suggests alternatives to U.S. stocks may offer “superior” risk-adjusted return prospects this year. In other news, one expert is warning that Friday’s jobs data may spell trouble for the economy. That data indicates that the U.S. unemployment rate recently fell to 3.4%, an over-50-year low. Wharton professor Jeremy Siegel predicts this will encourage the Fed to keep interest rates higher for longer. He believes “continued increases will increase the risk of a recession in the second half of this year.”

Yahoo! Finance/Brian Sozzi
Stock market is basically going nowhere for the rest of the year: Goldman Sachs

Investors have seen the best the stock market has to offer in 2023, according to Goldman Sachs.

“A soft landing — and in fact above-trend growth — is already priced in U.S. equities. Valuations are elevated vs. history and will be constrained by an eventual rise in interest rates. Even avoiding recession, earnings are unlikely to grow substantially in 2023,” Goldman Sachs chief U.S. equity strategist David Kostin wrote in a new note on Monday.

Kostin lifted his year end S&P 500 price target to 4,000 from 3,600, but he added the debt-ceiling debate is likely to be a key risk. The S&P 500 currently resides at 4,111 after a solid 7% year-to-date rally.

The closely watched strategist said alternatives to U.S. stocks such as non-U.S. stocks, credit, and cash offer “superior” risk-adjusted return prospects.

Continue reading, here.

Markets Insider/Theron Mohamed
Wharton professor Jeremy Siegel warns the blowout US jobs report may be bad news for stocks – and could lead to a recession this year

The US economy’s surprising resilience could be bad news for stocks, and might raise the risk of a recession this year, Jeremy Siegel has warned.

The US added 517,000 jobs in January, government data released Friday showed, crushing the 185,000 consensus nonfarm payrolls estimate from economists surveyed by Bloomberg. At the same time, the US unemployment rate fell to 3.4%, its lowest level in more than 50 years.

Siegel, a professor emeritus of finance at the Wharton School, said in a Fox Business interview Friday that the unexpected strength of the labor market could result in the Federal Reserve keeping interest rates higher for longer.

You can read the full article, here.

Fox Business/Megan Henney
US economy could see ‘second chapter’ in pandemic price surge

The new year brought with it hope that a long, painful season of high inflation was finally coming to a close – but the U.S. economy may not be out of the woods yet.

In a note to clients last week, Ben Emons of the Connecticut-based NewEdge Wealth warned that “there are signs of a second chapter in the pandemic price surge,” citing higher than expected inflation readings across the globe. The signs include an unexpected jump in the Spanish inflation rate after a five-month period of slowing price growth, on top of increases in the consumer price gauges in Australia, Japan and Italy.

In making his case, Emons – a senior portfolio manager – cited Fed research published in January that suggests inflation has become more synchronized globally and is driven by many of the same factors, including housing, energy and transportation. The study indicates that if inflation spikes in several developed nations, it is likely to rise in the U.S. as well.

You can read the full article, here.

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