Every market strategist seems to have the same outlook going into 2023: The market will struggle in the first half of the year, then rally toward the end. This groupthink alone should be taken as evidence that there is a high probability of this forecast being wrong.
‘Tis the season: it is the pre-holiday ritual known as final exams. The market has tests as well. This quarter we have rallied off of the September lows right up to the 200-day moving average. We hit that at the end of November, and since then have been negative. Getting over the 200-day moving average is a big test, and thus far the market has failed.
This has been a tough year in the market. Thankfully, the rally we predicted has occurred. We have seen negative results year-to-date even still, but it could be worse: you could have put your money with FTX.
There are many lessons to be learned in the shortest run ever as a Prime Minister of Great Britain, and I’m sure there will be books written that will take longer to read than Ms. Truss’ tenure. We are going to focus on two immediate lessons that deal with economics and how markets work.
The third quarter ended poorly last week in what has been a very frustrating year for markets. It begins to feel like it will never end; it always seems that way when the market finally hits bottom and starts climbing. Times like this remind us to focus on the fundamentals.
