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Bullish or Bearish on 2023? Zacks January Market Strategy

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The following is an excerpt from Zacks Chief Strategist John Blank’s full Jan Market Strategy report To access the full PDF, click here.

With the start of any calendar year, the Wall Street firms offer up their prognostications on the S&P 500 returns delivered by year-end 2023.

Let’s build up a fresh stock market outlook from that collected group.

Next, inspect the summary statistics of the major investment strategists on the sell-side.

I. A Summary of the Wall Street Sell-Side Community

CNBC offered a summary current 2023 targets from top Wall Street strategists, with...

A Maximum target: 4,575 — Sam Stovall, CFRA
A Minimum target: 3,725 — Venu Krishna, Barclays
An Average target: 4,147
A Median Target: 4,100

According to research done by Stock Strategist Ryan Detrick:

“The S&P500 is up an average of +9.1% a year since 1950. So, let's say that between 8.0% to 10% is 'an average year' for investors. Incredibly, a gain of between 8% and 10% has only happened four times. In other words, average isn't always so average.”

Zacks acknowledges major uncertainty lies ahead for stock investors, in the New Year.

Yet, most Zacks stock strategists also remain modestly bullish on stocks in 2023.

The basic point is that major U.S. indices will rally before the bottom is found.

II. Zacks DEC Sector/Industry/Company Telescope

The message from the latest Zacks Industry Ranks is this: the U.S. consumer is not dead.

Consumer Staples leads at Very Attractive. That is the sole leader. That is very defensive. Consumer Discretionary got up to a Market Weight, led by Apparel.
Energy and Financials fell to Market Weights. But the domestic Drillers, the Major Banks, and the Investment funds look great. That is an odd, but reassuring mix.

Industrials are at Market Weight, once again. Metal Fabricating, Machinery & Industrial Products stand out, once again.

Health Care fell to an Unattractive sector. Utilities became just Unattractive. Telephone is a clear leader. Communication Services stayed at Very Unattractive.

(1) Consumer Staples got to a Very Attractive rating from Attractive. Tobacco & Food are tops.

Zacks #1 Rank (STRONG BUY) Stock: Heineken (HEINY - Free Report)

(2) Energy
slid to Market Weight from Very Attractive. Drillers looked the best.

Zacks #1 Rank (STRONG BUY) Stock: Helmerich & Payne (HP - Free Report)

(3) Financials
fell to Market Weight from Very Attractive. Major Banks and Investment Funds remain the best. 2023 recession worry, and Fed rate hiking remains relevant.

Zacks #1 Rank (STRONG BUY) Stock: ING Group (ING - Free Report)

(4) Consumer Discretionary
rose to Market Weight from Very Unattractive. Apparel is best.

(5) Industrials stayed at Market Weigh. Metal Fabricating, Machinery, and Industrial Products/Services look the best.

(6) Health Care fell to Unattractive from Attractive. Drugs were the best, and they were just OK.

(7) Info Tech rose to Unattractive from Very Unattractive. Misc. Tech looked great.

(8) Materials rose to Unattractive from Very Unattractive. Metals Non-Ferrous look best.

(9) Utilities became just Unattractive. Utilities-Telephone is a clear leader now.

III. Conclusion

Any New Year will introduce new ideas on trading and investing.

After so many stock blow ups in 2022, it will be hard to believe strongly in ideas offering fresh opportunities.

But there will be meaningful returns made -- on (a fair number) of stocks in 2023.

Enjoy the rest of the Zacks JAN 2023 Market Strategy report.

Warm Regards,

John Blank
Zacks Chief Equity Strategist and Economist

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Helmerich & Payne, Inc. (HP) - free report >>

ING Group, N.V. (ING) - free report >>

Heineken NV (HEINY) - free report >>

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