The stock market in 2023 is simply a different animal than it was in 2022. All the major indexes are up, risk-on is back, and growth stocks are leading the way. Happy days are here again, right? Not so fast. The market has had a strong January, but stocks also rose sharply in October and November 2022 – before face-planting in December. Recession risks are clearly present and may be rising, as evidenced by the GDP & corporate earnings figures. Stocks in January appear to have risen on a valuation bounce and on hopes, if not expectations, that central banks will begin to reverse course sometime in 2023. While year-to-date stock gains may prove to be a house of cards, for now investors are happy to see green on the screen.
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