Tough challenges in 2022 drove investors nuts, so they had to lick their wounds due to heavy losses. Global stock and crypto markets were overwhelmed by turmoil amid simmering geopolitical jitters. No wonder, leading analysts came up with grim economic forecasts at the year-end.
Gordon Johnson, founder and CEO of GLJ Research, cautioned that Tesla shares might plummet by 60% from the current market price of $120 to $23 apiece in 2023. For the time being, the shares of Elon Musk’s company have to survive the demand crisis and fierce competition among e-car manufacturers. Interestingly, Gordon Johnson thinks that Elon Musk is to blame for the tepid performance of his own company as he is selling shares worth billions of dollars and creating drama about his Twitter business.
Analysts at Saxo Bank are betting on a gold rapid rally in 2023 for the obvious reason that inflation will hardly loosen its grip in the US and worldwide. In this context, the precious metal is expected to skyrocket to $3,000 per troy ounce. Meanwhile, gold is trading at about $1,800 per troy ounce.
Experts also predict tumult in the US stock market which will set the stage for a crash in the S&P 500 viewed as the financial barometer of the US economy. The index slumped by 20% in 2022. Analysts foresee a firm bearish trend in the S&P 500. US-based Truist investment bank reckons that the index will hit the bottom at 3,400.
The US economy is facing a new Great Depression because the Federal Reserve does not realize the gravity of deflationary signals. According to Ark Invest CEO Cathie Wood, the US economic growth might slow down to such an extent that GDP could weaken to the rates recorded before the Great Depression, the most severe crisis in the early 20th century.
Back in 1929, the Federal Reserve pushed up interest rates sharply to crack down on speculative activity. However, in 1930, Congress set tariffs of more than 50% on 20,000 items of merchandise. This move unleashed the Great Depression both in the US and the global economy. Experts warn that similar current conditions in the US economy are a bad omen. If the central bank sticks to its aggressive tightening as in 2022, the scenario of 1929 could be replayed.
