Big plans for 2023🌍
Gm friends and investors!
Historically, the S&P 500 has rebounded by an average of 15% in the next year following a significant loss.
But trying to predict the market is often never a good idea.
We still have an incredibly tight job market, and persistent inflation still on the horizon.
Highlights
What’s next for the fed?
Buying a house in 2023
Mr. Bankman-freid pleads not guilty
S&P 500
The stock market’s first week of 2023 has been pretty mixed. The first few days of consolidation with a pop on Friday reacting positively to the job market.
Ironically, a tight labor market will keep interest rates higher for longer and inevitably hurt stocks in the long run.
Economy
What’s next?
Despite talks of recession, some experts forecast that corporate spending will continue at its usual level in 2023, much to the relief of many CFOs.
Over 33% of respondents to CNBC's CFO Council Q4 survey said they expect their company's spending to rise in the next 12 months, while 39% said it would stay the same and 22% said it would decrease.
“It's a game of musical chairs for the corporate world. You’re going to have the strong companies with a strong balance sheet that are going to take advantage of other weaknesses from other companies." Bleakley Financial Group said.
Meanwhile, during the December Federal Reserve policy meeting, the Fed raised interest rates by another 0.50%. Fed Chairman Jerome Powell indicated that Fed officials see higher rates for "some time" ahead.
Policymakers expressed the importance of keeping the restrictive policy in place while inflation holds high - aka Fed Minutes.
Around the World
Germany is taking action to reduce its reliance on Russian energy. Yesterday, the nation announced plans to build hydrogen-fueled power plants with Norway and a major pipeline between the two countries.
Energy security is set to be strengthened thanks to this collaboration, according to the CEO of Equinor.
But the country is facing a crisis - annual inflation is at its highest in 70 years, due to the Russia-Ukraine war. Germany is under pressure to make changes and ensure its energy security.
Crypto
Not guilty??
This week, Sam Bankman-Fried, the former FTX founder, denied all accusations of federal fraud in a New York court.
Other charges he is facing include:
Money laundering
Conspiracy to commit wire fraud
Securities fraud
It has been a mere two months since Bankman-Fried's cryptocurrency business went into a downward spiral.
It's been settled: Coinbase has been found in violation of New York state laws and is paying the price.
The agreement reached on Wednesday mandates a $50 million penalty fee and an additional $50 million to be put towards an improved compliance program.
This announcement comes on the heels of the FTX debacle and a statement from the Federal Deposit Insurance Corporation about the risks posed by cryptocurrency-related activities.
The FDIC said:
"Given the significant risks highlighted by recent failures of several large crypto-asset companies, the agencies continue to take a careful and cautious approach related to current or proposed crypto-asset-related activities and exposures at each banking organization."
The settlement between Coinbase and New York is a reminder of the need to remain vigilant in regard to the crypto industry.
It's an ever-changing landscape, and it's important to stay informed and take the necessary steps to protect yourself and your investments.
Real Estate
Buying a House in anytime soon?
The current outlook for potential homeowners isn't great. Mortgage application volume has decreased by 13.2% in just two weeks. The average contract interest rate for 30-year fixed-rate mortgages has also risen to 6.58% from 6.34%.
It's worth taking a step back to remember that at the end of 2021, the average rate was 3.33%.
An MBA economist has weighed in on the situation, saying that purchase applications have been heavily impacted by the slowdown of both new and existing homes on the market.
In conclusion, the current mortgage market isn't ideal for those looking to buy a house in 2023.
Thank you for reading!
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