ten macroeconomic events that Bank of America

 Here’s a summary of the ten macroeconomic events that Bank of America

 1. Risk-on in mid-2023 – The Fed’s hawkishness is expected to peak sometime in the first half of 2023. They estimate the S&P 500 to end 2023 at or near 4000, with earnings per share at $200. 💚

2. A recession is inevitable – BAC sees the U.S., U.K., and E.U. facing a near-certain recession. The U.S. is expected to have a mild recession in the first half of 2023. ☹️

3. Rates elevated until late 2023 – The 2-year and 10-year U.S. Treasuries are expected to end 2023 at 3.25%. 🥺

4. China’s reopening will be choppy – BAC doesn’t see a full reopening of China until the second half of 2023. 🔪

5. Emerging Markets to produce strong returns – Emerging Markets will likely be seen as a favorable investment once peak U.S. inflation ends and China fully reopens. 📭

6. Metal prices to jump in 2023 with a copper rally of 20% anticipated – China’s reopening, a peak in the U.S. Dollar, and continued growth in green energy are likely to push metals higher. ⚙️

7. Oil prices to remain elevated – Brent crude average target is $100/per barrel, rising to $110 in the second half of 2023. 🛢️

8. Capex to remain strong, despite a recession – ESG, the strong labor market, and the movement from some manufacturing and services from China to the domestic front are likely to keep capex strong during a recession. 💵

9. Labor market worsens – a peak in unemployment at 5.5% in Q1 of 2023 is expected to hit spending. 👷‍♂️

10. Corp. balance sheets turn conservative, and the Fed stops hiking – Investment grade credit total returns anticipated to be 9%, peak default rate of 5%. ⬆️