As we close out the year it looks like Santa will not be showing up this year. After one of the most volatile years in history we are thankful to see it come to an end. Bear markets come and bear markets go; it’s just part of the process. The only sector that will probably close up this year will be energy. You don’t see just one sector end up positive for a year that often, in fact you probably have to go back to 1929 or 2008 to find this occurrence. As this is the last Wealth Watch of the year, I’m going to give my predictions for 2023. The first quarter of 2023 will be very volatile, and since we are closing out the year on a weak note, that volatility will likely carry over into the first quarter. 2023 will end up in double digits for the year. The economy is strong, unemployment is weak, anyone who wants a job can find one, and our banking system is very solid. Inflation is starting to roll over, the Fed will stop raising rates at the March meeting and that will take a lot of pressure off the markets. Historically, the market has only closed lower 2 years in a row 4 times, so the odds are very high for a positive year in 2023.  Bonds will start to rebound after the first quarter. The bond market has overshot and will finish up in 2023.
West Texas Intermediate Crude will close over $100 dollars a barrel in 2023. China is opening back up which will create a lot of demand in Q2, 3 and 4. Also adding to high oil prices is something that it appears many have overlooked. The Biden administration opened the strategic oil reserve a few months before the election, pushing a lot of stored oil out into the market and pushing prices lower. A few weeks ago, they stopped depleting the strategic oil reserves and oil has started to climb again. They will need to replenish what they took out of the strategic oil reserve along with the fact there will be more demand in 2023.
Supply chain issues are also starting to correct themselves which will help bring down inflation. Again, these are just my predictions, but there are a lot of positive signs that 2023 could be a very good year for investors.