"2023 will be tough for US stock investors"

According to veteran equity strategist Ed Yardeni, 2023 will be a tough year for equity optimists. Yardeni Research founder Ed Yardeni said that investors who are optimistic about equity investments will have to go through a very narrow path to declare victory in 2023. Speaking to Bloomberg TV, Yardeni said that if the economy remains strong and the Fed raises interest rates further as a result, equity optimists “are almost certain not to win” in 2023. According to Yardeni, the key factor for the narrow path that will allow equity investors to win will be a faster-than-expected inflation decline. Stating that he also expects a faster inflation decline than market expectations, Yardeni drew attention to the softening in second-hand car, rent and energy prices and predicted that headline inflation could be recorded in the US in early 2023 at 3%-4%. Many strategists were wrong in 2022 by buying the theme that inflation was rising due to temporary factors. As a result of the Fed's rapid interest rate hikes in the face of rising inflation, the S&P 500 has lost over 20 percent this year, while the Nasdaq 100 has lost around 35 percent. Noting that leading indicators scare everyone, Yardeni said, "If there is going to be a recession, it will happen soon. Markets are afraid of that too."