My investing muse (08 Jan 2024) - 2023 market roundup, Q4 earnings EPS outlook
My investing muse
2023 Market Roundup
2023 markets roundup. What are the top-performing asset classes? All asset classes seem to do well except for Crude oil (down 11.5%), Chinese equities (down 12.5%), and commodities (down 12.2%).
Interestingly, the top-performing asset classes include Japanese equities (up 30.1%) US large cap (up 24.2%), and European equities (up 17.3%). Is it time for us to consider Japanese and European equities?
Here are the best-performing sectors of 2023—and the ones that fell behind—in a year defined by AI, high-interest rates, and resilience. The top losers from 2023 are utilities, consumer defensive, vaccine makers, oil & gas exploration and agricultural inputs.
Both charts above are from Visual Capitalist. Please refer to their websites for more such charts and details.
S&P500 EPS Outlook (Q4/2023 earnings)
Analysts lowered Q4 EPS estimates for $SPX companies in 9 of 11 sectors during the 4th quarter, led by the Health Care (-21%) sector. - FactSet
Does this mean that most are not going to make profits? Not necessary. But more sectors can expect lesser profits from the coming Q4 earnings. It will be interesting to see how the market reacts to the earnings.
Conclusion
The market ended 2023 on a high and it is not surprising that there have been some profit-taking during the past week. What is interesting is the market's price and the value it has created. The price always converges with its value at some points. If the price is much different from its value, we can expect corrections to happen over time as the market corrects itself.
We should expect some of the earnings to remain strong. I have concerns about commercial real estate (CRE), banking and debts. US officials have been talking up a soft landing. I think that time will be the best judge of these.
Let us look forward to another earnings season. I recommend some hedging and avoiding leverage. Is it time for us to consider other asset classes like Japanese equities?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Great ariticle, would you like to share it?