Recalling the rocky market performance of 2022, which marked the worst broad equity market performance since the financial crisis, with the S&P falling by almost 20%, many investors were understandably anxious about the prospects for 2023.
While forecasting macroeconomic factors is an intricate task, Seeking Alpha challenged its analysts to devise a well-supported forecast for the S&P 500 at the end of 2023. Today, we will dissect the events of the year and bestow recognition upon the winners.
Our contest garnered cautious projections from the participating analysts at the outset of 2023. They raised concerns about a myriad of factors, including ongoing interest rate hikes, worries about inflation, technical aspects, and geopolitical issues. Undoubtedly, many of these concerns persisted or even intensified during certain periods of 2023, as the market took investors on a rollercoaster ride.
The market surged in the first half of 2023. However, Q3 commenced with a hint of instability, as indices seemed poised to relinquish all their year-to-date gains, with stocks stumbling towards Halloween. Ultimately, the prospect of slowing inflation and the optimism for rate cuts in 2024 prompted the market to dismiss a new geopolitical conflict and rally by approximately 14% in the final two months of the year.
Seeking Alpha’s News Team offered a year-end commentary on 2023, highlighting that the year’s lows were observed right at the beginning of January, and that the Federal Reserve’s dot-plot for rates “cemented” the rally towards year-end.
Recognizing the Winners of the 2023 Market Prediction Contest
The chart below compares the forecasts of the 35 analysts who boldly submitted predictions against the actual monthly performance of the S&P 500 over the year.
Amidst all the bold projections, only three analysts forecasted that the S&P 500 would conclude the year higher than its closing value of 4,769.83.
The top three closest estimates were as follows:
1) Dan Victor, CFA, with a year-end prediction of 4,777 – less than 8 points away from the actual close (+8pts).
2) ANG Traders, foreseeing a market rebound and predicting a closing level of 4,900 (+130pts).
3) Craig Blanchfield, CFA, expecting the index to rise to 4,625 (-145pts).
Dan Victor claimed the closest-to-the-pin award, earning a $1,500 prize. ANG Traders secured $1,000 for 2nd place, and Craig Blanchfield won $500 for the third-closest guess.
We extend our gratitude to all those who participated!
In the new year, keep an eye out for our forthcoming article summarizing the market predictions from our analysts for 2024.