In these days, stock markets are characterized above all by one trend – by strongly fluctuating prices. Rising interest rates, high inflation and concerns about the economy are causing violent swings on the trading floor, both up and down. “After the ‘annus horribilis’ of 2022, we expect economic development to bottom out in 2023,” said Moritz Kraemer, chief economist at Landesbank Baden-Württemberg, on the occasion of the presentation of the capital market outlook for the coming year. The analysts at the largest German state bank predict that the stock market will initially continue to be difficult in 2023. Since the beginning of the year, individual markets have lost a fifth of their value. Further price declines are likely.
Because the analysts expect further profit warnings from the companies. Currently, many ratings are still based on overly high profit expectations. For the leading German index, the Dax, financial experts expect a further decline to 13,000 points by the end of June 2023 and a recovery that may then begin. At the end of 2023, the Dax will be at 15,500 points.
The slump on the stock markets is accompanied by a crisis in growth stocks. “In turn, ‘value’ sectors such as energy were en vogue. This trend shouldn’t be over yet.” The bank’s stock experts see potential in the banking, automotive and utility sectors in particular. “In the course of 2023, cyclical sectors such as industry or chemicals are likely to gain in importance again,” it continues. The papers of the tech stocks from Alphabet (formerly Google), Meta and Amazon are currently under pressure. But that doesn’t change anything about their outstanding market positions in their segments of online advertising, online trading and cloud computing. “Cloud solutions are now being used to reduce costs in the threatening recession, and in the economic recovery that is not yet foreseeable but will surely come, no advertiser will be able to avoid their reach.” The LBBW experts also do not really trust the prices on Wall Street. Because Wall Street is valued even higher than the long-term average. The experts see the American index S&P 500 at 3600 points in June next year and then rising to 4250 points at the end of 2023.
The financial experts are assuming that the price of the precious metal gold, which has always been praised as a crisis currency, will continue to fall. Investments in gold had lost a lot of value since the start of the Ukraine war. This does not exactly speak for the crisis resilience of the precious metal. After a significant increase at the beginning of the conflict, the price has fallen significantly again. For mid-2023, the LBBW analysts expect a price per troy ounce of gold of USD 1,650.