2022 was a volatile year for equities. Ecnomists at BNY Mellon expect S&P 500 Index to remain under pressure before starting to move higher.

More pain before gain in equities

“We don’t expect stocks to bottom until the market prices in a recession and Wall Street’s consensus 2023 earnings per share (EPS) estimate falls further. At $232, the consensus EPS estimate is considerably higher than our $205-$215 estimate, which reflects the weakening economy.”

“Our 2023 year-end range for the S&P 500 is wide at 3,800-4,500, reflecting the considerable macro-uncertainty ahead.”

“Although it is unlikely the market will have a V-shaped recovery given the prospect of higher rates and inflation continuing in the coming years, we do expect returns to be positive in 2023.”