Just to recap, 2022 marked the worst broad equity market performance since the financial crisis. The S&P closed lower by almost 20%, and many investors were concerned about what 2023 would bring.
While it's extremely difficult to forecast macroeconomic factors, we challenged our analysts to come up with a supported forecast for the S&P 500 at year-end 2023. Today we'll review the year that was, and unveil the winners.
Indeed, the analysts who participated in our contest were overwhelmingly cautious going into 2023. They cited everything from continued interest rate increases, inflation worries, to technicals and geopolitical concerns. Undoubtedly, many of these concerns remained or even intensified during parts of 2023, and the market offered investors a bit of a rollercoaster ride.
Markets powered higher during the first half of the 2023. Q3 started off a bit shaky, and it looked like the party was over, as indices appeared ready to give up all their YTD gains as stocks tumbled towards Halloween. Ultimately though, the promise of slowing inflation and the hope for rate cuts in 2024 led markets to overlook a new geopolitical conflict and rally some ~14% over the last two months of the year.
Seeking Alpha's News Team posted this year-end commentary about 2023, noting that the year's lows were right at the beginning of January, and that the Fed's dot-plot for rates "cemented" the end-of-year rally.
The 2023 Market Prediction Contest Winners
The below chart plots the forecasts of the 35 analysts who bravely submitted predictions, against the actual monthly performance of the S&P 500 over the year.
At the end of the day, only 3 analysts predicted that the S&P 500 would finish higher than its 4,769.83 closing value.
The 3 closest estimates landed as follows:
1) Dan Victor, CFA, whose year-end prediction of 4,777 was less than 8 points off the actual close. (+8pts)
2) ANG Traders who were confident about a market rebound and predicted a closing level of 4,900. (+130pts)
3) Craig Blanchfield, CFA, who expected the index to rise to 4,625. (-145pts).
The closest-to-the-pin award earns Dan Victor a $1,500 prize. ANG Traders will walk away with $1,000 for 2nd place. And Craig Blanchfield wins $500 for the third-closest guess.
Thanks to all those who participated!
As for the new year, be on the lookout for our upcoming article summarizing the market predictions from our analysts for 2024
