Goodbye 2022, and Hello 2023! The year 2022 was a pitiable year for many. The pandemic seemed to abate compared to 2020 and 2021, but others weren't promising.
First and foremost, the economy. There are three major leading indicators for the economy:
1) Housing market -- Very important part of the economy. Real estate is very local, but nationwide real estate affects the nation's economy. Our national home sales declined by 3.3% M/M & 38.9% Y/Y in November 2022. National average sale price posted a 12% Y/Y decline in November 2022. In the RE market, decreased volume leads to the price down:
2) Consumer sentiment -- Conference Board of Canada's consumer confidence index dropped 1.3 points to 77.8 (not much), and its latest survey indicates that businesses "continue to have concerns about rising cost of labour and capital, a shortage of qualified staff, interest rate hikes, and, more recently, weak market demand". From the consumers' side, this year's box day shopping footprinting increased a lot, specifically that Bayshore and St Laurent shopping centers were hard to get into or found a parking spot. Services such as restaurants and travel demands are incredibly high. There is no sign of any worry about recessions among consumers. Some CFCers were screaming that big techs are laying people off. Don't forget how many extra people they hired during the 2020 pandemic high owing to everything going online. Also, tech employees are only 2% of the total labor force.
3) Stock market -- The most important part of the economy. The stock market in general could reflect the economy 6-12 months in advance. "A picture is worth a thousand words". See their relationship in the diagram below:
In December 2021, Wall street's smartest brains predicted that S&P 500 would end the year 2022 with:
CREDIT SUISSE 5200
GOLDMAN 5100
JPM 5050
CITI 4900
UBS 4850
BARCLAYS 4800
WELLS FARGO 4715
BANK OF AMERICA 4600
MORGAN STANLEY 4400
BMO 5300
RBC 5050
S&P 500 finished at 3839 at end of 2022. Not one of them came close. Their prediction is not much better than the so-called CFC's Figures & Toes Counting Master(掐大师).
I pay zero attention to the predictions from any of them. None one of them got a clue, big names or small names. CFC's master is just a laughing stock. For me next year's stock market is like this:
You have to filter all the noises out and at least understand it in a hindsight.
Regarding the aforementioned economic and stock market cycle, where are we now in the cycle?
The market moves by collected actions. Post your view on where we are from the diagram below, then we can have CFCers' collected views on the stock market at end of 2022.
I believe we are back and forth between complacency and anxiety, sometimes touching the edge of denial. What do you think?
Happy New Year to all CFCers! Wish you all have a flourish 2023!
First and foremost, the economy. There are three major leading indicators for the economy:
1) Housing market -- Very important part of the economy. Real estate is very local, but nationwide real estate affects the nation's economy. Our national home sales declined by 3.3% M/M & 38.9% Y/Y in November 2022. National average sale price posted a 12% Y/Y decline in November 2022. In the RE market, decreased volume leads to the price down:
2) Consumer sentiment -- Conference Board of Canada's consumer confidence index dropped 1.3 points to 77.8 (not much), and its latest survey indicates that businesses "continue to have concerns about rising cost of labour and capital, a shortage of qualified staff, interest rate hikes, and, more recently, weak market demand". From the consumers' side, this year's box day shopping footprinting increased a lot, specifically that Bayshore and St Laurent shopping centers were hard to get into or found a parking spot. Services such as restaurants and travel demands are incredibly high. There is no sign of any worry about recessions among consumers. Some CFCers were screaming that big techs are laying people off. Don't forget how many extra people they hired during the 2020 pandemic high owing to everything going online. Also, tech employees are only 2% of the total labor force.
3) Stock market -- The most important part of the economy. The stock market in general could reflect the economy 6-12 months in advance. "A picture is worth a thousand words". See their relationship in the diagram below:
In December 2021, Wall street's smartest brains predicted that S&P 500 would end the year 2022 with:
CREDIT SUISSE 5200
GOLDMAN 5100
JPM 5050
CITI 4900
UBS 4850
BARCLAYS 4800
WELLS FARGO 4715
BANK OF AMERICA 4600
MORGAN STANLEY 4400
BMO 5300
RBC 5050
S&P 500 finished at 3839 at end of 2022. Not one of them came close. Their prediction is not much better than the so-called CFC's Figures & Toes Counting Master(掐大师).
I pay zero attention to the predictions from any of them. None one of them got a clue, big names or small names. CFC's master is just a laughing stock. For me next year's stock market is like this:
You have to filter all the noises out and at least understand it in a hindsight.
Regarding the aforementioned economic and stock market cycle, where are we now in the cycle?
The market moves by collected actions. Post your view on where we are from the diagram below, then we can have CFCers' collected views on the stock market at end of 2022.
I believe we are back and forth between complacency and anxiety, sometimes touching the edge of denial. What do you think?
Happy New Year to all CFCers! Wish you all have a flourish 2023!
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