What Should Investors Expect in the Coming Months?

Want an in-depth forecast?

And at the center of the storm is inflation — the problem that just won’t go away.

• ICYMI: The PCE price index — another measure of inflation — rose 5.4% in January from a year ago.
• Behind the numbers: The increase was higher than economist forecasts — showing that the fight against inflation isn’t over.

According to the Chief Economist of LPL Financial (CNBC), “the Fed will likely continue hiking into the summer. Markets will likely stay choppy during these months.”

What should you do on a rainy day?

A Feb. 2022 Reuters survey of 150 strategists showed:

• 56% expect a market correction in the next three months.
• The majority expect market indexes to “fall short, or just about recoup their 2022 losses” (implying a 20% rise in the S&P 500).
• 70% expect value stocks to outperform growth stocks this year.

Major indices like the S&P 500 are up nearly 4% in 2023, but “the recovery in earnings would have to be quite strong to justify these levels” — Wolf von Rotberg, Equity Strategist at Bank J. Safra Sarasin (Reuters).