Following a down year for the stock market, there is no shortage of recession predictions for 2023, especially as the Federal Reserve has signaled it will continue to raise interest rates to fight inflation.
It turns out that value stocks — shares of mature companies that trade relatively cheaply to expected earnings — fared pretty well during 2022:
FactSet
The S&P 500 Value Index was down only 5% during 2022, with dividends reinvested, while the full S&P 500
SPX,
fell 18% and the S&P 500 Growth Index dropped 29%.
With similar macro forces in play as those of last year, Michael Brush interviews three successful value-oriented money managers who share their outlooks for corporate earnings and possible recession, and name six value stocks for 2023.
Stock selections for multiyear commitments: 20 stocks expected by Goldman Sachs to gain the most from Washington’s clean-energy spending
The jobs market is finally slowing
At this point in the economic cycle, any news pointing to a strong U.S. economy can spook investors, because of fear that a prolonged cycle of interest-rate increases by the Federal Reserve to fight inflation will push down prices of bonds and stocks, as happened in 2022.
Following the “bad news is good news” logic, stock investors cheered the Employment Situation Summary from the Bureau of Labor Statistics on Jan. 6. The report showed that the U.S. added 223,000 full time jobs in December — the lowest monthly employment increase in two years.
Then again, that number was a surprise. The consensus estimate among economists polled by the Wall Street Journal was for 200,000 jobs to be added in December.
Jeffry Bartash takes a deep look at the December employment numbers.
Rex nutting argues that the Fed has set up a soft landing for the economy, as long as it doesn’t mess it up.
Looking ahead: Fed’s message to stock market— big rallies will only prolong painful inflation fight
A big change for the global bond market
Former European Central Bank President Mario Draghi played a role in the adoption of negative interest rates amid economic stimulus efforts.
AP
A perverse result of the long cycle of stimulus by central banks was the “innovation” of negative-yielding government bonds in Europe and Japan, which hit a peak of more than $18 trillion in 2020. This created what could be considered a new tax on banks and insurance companies that were forced under regulations to buy government paper with negative yields. Now the bond market is getting back to normal, as Joseph Adinolfi reports.
How to sell a home in a sagging real-estate market
Getty Images/iStockphoto
During the long sellers’ market for homes in the U.S., it was common for buyers in hot markets to bid up prices. But now things have changed. Here are the concessions home sellers are making to get deals done.
More housing-market coverage from Aarthi Swaminathan:
Don’t chase performance
Getty Images
In any calendar year, some money managers with specialized strategies will outperform the broad stock market. Some investors will be tempted to jump aboard after a mutual fund or ETF has an excellent year. Mark Hulbert explains why chasing fund performance tends to work out poorly.
Read on: No one knows which stocks will fuel the next bull market, but they likely won’t be the bear market’s winners
More crypto shoes may drop
Terrence Horan, Dow Jones
Following a year of so many failures of companies in the virtual currency space, 2023 has started with more uncertainty, including mass layoffs and consideration of a bankruptcy filing by Genesis Global Trading, according to a Wall Street Journal Report.
Genesis Global Trading is owned by Digital Currency Group, which also owns Grayscale Investments, the manager of the Grayscale Bitcoin Trust
GBTC,
GBTC has $10.6 billion in assets under management. Its closing share price was $8.45 on Jan. 5 — a 45% discount to the value of the fund’s bitcoin
BTCUSD,
holdings, which was $15.38 a share, according to Grayscale.
MarketWatch Editor in Chief Mark DeCambre rounds up this week’s developments in the virtual currency industry in the Distributed Ledger newsletter.
I-bonds are still hot
Last year, you could buy Series I savings bonds from the U.S. Treasury with interest rates as high as 9.62%. The current rate is 6.89%. Beth Pinsker explains how you might max-out your interest on I-Bonds.
Layoffs mount at large tech companies
AFP via Getty Images
Amazon.com
AMZN,
and Salesforce
CRM,
each announced mass layoffs this week, and analysts at Morgan Stanley are calling for more head count reductions at big tech companies. James Rogers has maintained a running list of tech layoffs.
More about layoffs and related business developments:
Your retirement accounts in 2023
If you are self-employed, you can supersize your pretax retirement account contributions.
Getty Images/iStockphoto
If you contribute to an individual retirement account, the amount of pretax money you can contribute this year is limited by the Internal Revenue Service to $6,500. If you have a 401(k), 403(b) or similar employer-sponsored account available through your employer, your annual contribution limit for 2023 is $22,500, plus a $7,500 “catch-up” contribution if you are at least 50 years old.
But what if you want to put aside even more for retirement, with tax advantages? Many people can do so — here’s how.
Related: Roth IRA conversions — take advantage of this limited-time offer to save on your tax hit
What’s wrong with a little competition?
The Federal Trade Commission has proposed new rules that would ban noncompete clauses in employment contracts. Andrew Keshner and Emma Ockerman explain the controversy over the proposed changes.
Life without a Speaker
Rep. Kevin McCarthy (R., Calif.)
AFP via Getty Images
Rep. Kevin McCarthy (R., Calif.) continues his bid to be the next Speaker of the House, but keeps losing votes as about 20 Republican members of the House of Representatives vote against him. Here’s continuing coverage of this developing story:
Want more from MarketWatch? Sign up for this and other newsletters, and get the latest news, personal finance and investing advice.
Following a down year for the stock market, there is no shortage of recession predictions for 2023, especially as the Federal Reserve has signaled it will continue to raise interest rates to fight inflation.
It turns out that value stocks — shares of mature companies that trade relatively cheaply to expected earnings — fared pretty well during 2022:
FactSet
The S&P 500 Value Index was down only 5% during 2022, with dividends reinvested, while the full S&P 500
SPX,
fell 18% and the S&P 500 Growth Index dropped 29%.
With similar macro forces in play as those of last year, Michael Brush interviews three successful value-oriented money managers who share their outlooks for corporate earnings and possible recession, and name six value stocks for 2023.
Stock selections for multiyear commitments: 20 stocks expected by Goldman Sachs to gain the most from Washington’s clean-energy spending
The jobs market is finally slowing
At this point in the economic cycle, any news pointing to a strong U.S. economy can spook investors, because of fear that a prolonged cycle of interest-rate increases by the Federal Reserve to fight inflation will push down prices of bonds and stocks, as happened in 2022.
Following the “bad news is good news” logic, stock investors cheered the Employment Situation Summary from the Bureau of Labor Statistics on Jan. 6. The report showed that the U.S. added 223,000 full time jobs in December — the lowest monthly employment increase in two years.
Then again, that number was a surprise. The consensus estimate among economists polled by the Wall Street Journal was for 200,000 jobs to be added in December.
Jeffry Bartash takes a deep look at the December employment numbers.
Rex nutting argues that the Fed has set up a soft landing for the economy, as long as it doesn’t mess it up.
Looking ahead: Fed’s message to stock market— big rallies will only prolong painful inflation fight
A big change for the global bond market
Former European Central Bank President Mario Draghi played a role in the adoption of negative interest rates amid economic stimulus efforts.
AP
A perverse result of the long cycle of stimulus by central banks was the “innovation” of negative-yielding government bonds in Europe and Japan, which hit a peak of more than $18 trillion in 2020. This created what could be considered a new tax on banks and insurance companies that were forced under regulations to buy government paper with negative yields. Now the bond market is getting back to normal, as Joseph Adinolfi reports.
How to sell a home in a sagging real-estate market
Getty Images/iStockphoto
During the long sellers’ market for homes in the U.S., it was common for buyers in hot markets to bid up prices. But now things have changed. Here are the concessions home sellers are making to get deals done.
More housing-market coverage from Aarthi Swaminathan:
Don’t chase performance
Getty Images
In any calendar year, some money managers with specialized strategies will outperform the broad stock market. Some investors will be tempted to jump aboard after a mutual fund or ETF has an excellent year. Mark Hulbert explains why chasing fund performance tends to work out poorly.
Read on: No one knows which stocks will fuel the next bull market, but they likely won’t be the bear market’s winners
More crypto shoes may drop
Terrence Horan, Dow Jones
Following a year of so many failures of companies in the virtual currency space, 2023 has started with more uncertainty, including mass layoffs and consideration of a bankruptcy filing by Genesis Global Trading, according to a Wall Street Journal Report.
Genesis Global Trading is owned by Digital Currency Group, which also owns Grayscale Investments, the manager of the Grayscale Bitcoin Trust
GBTC,
GBTC has $10.6 billion in assets under management. Its closing share price was $8.45 on Jan. 5 — a 45% discount to the value of the fund’s bitcoin
BTCUSD,
holdings, which was $15.38 a share, according to Grayscale.
MarketWatch Editor in Chief Mark DeCambre rounds up this week’s developments in the virtual currency industry in the Distributed Ledger newsletter.
I-bonds are still hot
Last year, you could buy Series I savings bonds from the U.S. Treasury with interest rates as high as 9.62%. The current rate is 6.89%. Beth Pinsker explains how you might max-out your interest on I-Bonds.
Layoffs mount at large tech companies
AFP via Getty Images
Amazon.com
AMZN,
and Salesforce
CRM,
each announced mass layoffs this week, and analysts at Morgan Stanley are calling for more head count reductions at big tech companies. James Rogers has maintained a running list of tech layoffs.
More about layoffs and related business developments:
Your retirement accounts in 2023
If you are self-employed, you can supersize your pretax retirement account contributions.
Getty Images/iStockphoto
If you contribute to an individual retirement account, the amount of pretax money you can contribute this year is limited by the Internal Revenue Service to $6,500. If you have a 401(k), 403(b) or similar employer-sponsored account available through your employer, your annual contribution limit for 2023 is $22,500, plus a $7,500 “catch-up” contribution if you are at least 50 years old.
But what if you want to put aside even more for retirement, with tax advantages? Many people can do so — here’s how.
Related: Roth IRA conversions — take advantage of this limited-time offer to save on your tax hit
What’s wrong with a little competition?
The Federal Trade Commission has proposed new rules that would ban noncompete clauses in employment contracts. Andrew Keshner and Emma Ockerman explain the controversy over the proposed changes.
Life without a Speaker
Rep. Kevin McCarthy (R., Calif.)
AFP via Getty Images
Rep. Kevin McCarthy (R., Calif.) continues his bid to be the next Speaker of the House, but keeps losing votes as about 20 Republican members of the House of Representatives vote against him. Here’s continuing coverage of this developing story:
Want more from MarketWatch? Sign up for this and other newsletters, and get the latest news, personal finance and investing advice.
