all right hi guys so this is my first

video for the new year and I'm gonna

Begin by talking about my top five stock

market forecasts for 2023 what do I

expect to happen in the markets this

year so before I begin always remember

that no one can predict short-term stock

market movements or no one can predict

the economy with absolute 100 certainty

because there are just too many unknown

variables there are too many moving

parts and we can't predict tomorrow's

news or next month's news all we can do

is to look at the current facts right

now and to make probabilistic guesses on

what's most likely to happen based on

current facts but of course markets are

Dynamic and you must be prepared for the

fact that anything can happen in the

markets always know that ultimately my

investment in trading decisions every

day have got nothing to do with my

economic and market forecast for example

when it comes to investing every year I

set aside a certain amount to invest

into the best companies in the market as

long as I identify AI companies that

meet my investment criteria they've got

very predictable sales earnings and cash

flow they've got high return on Capital

they've got strong operating margins

they've got a sustainable competitive

Advantage high growth potential I will

buy shares as long as the price is

attractive in other words it is

undervalued if I can get a good margin

of safety I will consistently buy shares

of high quality companies regardless of

whether I think that this is going to be

bullish or bearish regardless of whether

I anticipate whether interest rates are

going to rise more or less because it

doesn't matter in Investments I think a

multi-year investment Horizon and I know

that when I invest in great companies

today at a discount over time they're

going to deliver huge returns in my

Investment Portfolio and every day I

look for high probability trades to take

both option trades and stock trades and

again my economic and market forecast

don't influence my trading decisions my

decisions to trade are based on finding

stocks with high relative strength

strength and entering when I see the

appropriate technical patterns like when

the price is breaking out of a

consolidation pattern or breaking out

within a base pattern these are the

things that we teach in the course and

I've shared on YouTube as well so with

that in mind let's run through my five

top Market forecasts for 2023. now of

course the first question that everybody

would like to know is is 2023 gonna be

another bearish year are we going to go

lower or is it going to be a bullish

year now I don't have a crystal ball but

I can tell you that statistically we are

more likely to have an up year than a

down year now for 2023 we actually have

more than an 85 percent probability of

ending the year of the game

if you take a look at the last 95 years

of the U.S markets this is from 1928 to

2022. you can see that they were all

together

73 years that ended with a game we call

them the bullish years and these are the

ones that are uh over here so let me

kind of like highlight this entire group

these ideas that ended with a game

and they all together 73 of them and

these are all the years

that ended with a loss on the left

and they all together 22 of them so in

fact last year

in 2022 the S P 500 fell 19 which is

within this category over here there we

are that's 2022. so statistically if you

take any given year the chance of it

being up is 76 and the chance of it

being down is 23 so the odds are always

in your favor as a bull when you're

bullish on the market on any given year

you're going to be right a lot more than

you're wrong but when you are a bearish

person you're going to be right once in

a while but in the long run you're going

to be wrong most of the time and that's

why I choose to be more bullish than

bearish most of the time because then

I'm right most of the time and that has

been my secret of creating a lot of

wealth in the markets now specifically

for this year 2023 the odds of it being

bullish are even higher than 76.8

percent why because last year was

already a negative year so if you take a

look at this chart you can see that

after a negative year the chance of the

next year being negative is actually

pretty low in fact in the 21 instances

where markets declined

only three instances did the market

decline again the following year this

happened in 1974 the year I was born

2001 and 2002. in other words the chance

of you getting two negative years are

about 14 percent

but after negative year the chance of

the next year being positive is 18 out

of 21 which is about

85.7 so from a statistical perspective I

would forecast that 2023 will be a

bullish year now again is there a chance

it could be a barish here again of

course there's a 14 chance but so what

if it happens is it the end of the world

is it a bad thing not really in fact

after two bearish years if that really

happens then the years that follow will

be even more bullish so the point is to

stay invested into high quality

companies keep buying shares of great

companies and when the bull market comes

You're Gonna Get huge returns now

remember that we are currently within a

secular bull market I've mentioned this

before in fact we are halfway through

the secular bull market secular bull

markets last anywhere from 16 years to

20 years where right now at the ninth

year mark we are halfway through and you

can see that

last year we went through our second

psychical bear Market you can see two

bear markets cyclical secular bull

market continues two cyclical bear

markets bull market continues

so once this cyclical bear market ends

you can expect the secular bull market

to continue for at least another six to

ten years

Next almost every mother father son is

predicting that there will be a

recession in 2023 in fact you can see

that out of 60 economies and forecasters

they are median forecasts is a 65

percent probability of a recession this

year but there's a wide range of

forecasts again on one end you have got

like Bloomberg Bank of America giving a

hundred percent chance of a recession

you've got some other economies giving a

20 chance of a recession and Goldman

Sachs that compiled this data is

forecasting a 35 chance of recession

this year so how about more right so as

far as I'm concerned I'm in the camp

that there'll be no recession or if

there is a recession there'll just be a

mild recession

so that's my forecast so why do I think

that there'll be no recession or just a

mild recession well understand that many

people are expecting a recession because

of two reasons number one because of the

yield curve inversion number two because

they believe the Federal Reserve will

have no choice but to raise interest

rates to force the economy into

recession in order to bring down

inflation

so let me first talk about the first

point which is the yield curve inversion

now since 1968 there was a professor

called Campbell Harvey and he developed

this indicator that said that whenever

the three-month interest rate went above

the 10-year interest rate the yield

curve gets inverted that confirms a

recession so in other words when you see

this interest rate here 4.58 percent go

above the 10-year treasury yield of 3.56

percent

you can see it's about uh two basis

points above that means a yield curve is

inverted and again since 1968 this

indicator has been right eight out of

eight times so this is the ninth time

that this indicator is predicting a

recession so why shouldn't we listen to

it it's been right eight out of eight

times because

The Economist

uh Professor Campbell Harvey who

invented this indicator is now saying

that his indicator is wrong this year

okay so think about it if the guy who

invented this indicator is saying that

it's wrong

maybe there's something to it so why

does he say that his indicator is not

right this year two reasons the first

reason is because he argues that

although the yield curve has inverted

but this time the labor market is

extremely strong and this is an argument

I made before now remember that 70 of US

GDP comes from consumer spending as long

as people have jobs people are employed

they can spend the economy can't go into

a recession that easily and that's

what's happening right now as of the

last jobs report uh Friday 6th of

January the unemployment rate dropped

again from 3.7 percent the unemployment

rate is now 3.5 percent which is one of

the lowest in the history of U.S

employment

and there still is this big jobs workers

Gap in other words there are more

companies looking for workers than

actual people needing jobs so even

people who get retrenched from the

technology sector right now retrans from

Amazon and even Goldman Sachs they can

find jobs very easily because again

there's a lot more openings than job

Seekers so as long as again there are

jobs available people get jobs they can

earn money they can spend it's going to

be hard to get into a recession and that

is the professor's take on it which is

something I've mentioned before the

second argument the professor makes is

that his model of yield curve predicting

recessions is based on is based on

inflation adjusted yields a lot of

people are making the mistake of looking

at the nominal yields which means not

taking into account inflation so if you

just take a look at the nominal yields

yeah the 10-year yield minus a three

month yield is negative so the yield

curve is inverted based on nominal

yields but if you actually adjust for

inflation inflation is currently very

very high it's coming down if you're

just for inflation you can see that

inflation adjusted yields 10 year minus

three months is actually is actually

still very positive in other words the

yield curve is not inverted if you

account for inflation adjusted yields

and that's why the professor is saying

that his predictor or his u-curve

indicator uh could be really wrong this

year and it's not calling for recession

now currently if you look at the

real-time data the U.S economy is still

extremely extremely resilient the

current uh live GDP growth estimates for

quarter four of last year is now at 3.8

percent so GDP for Q4 of 2022 which was

last quarter

uh it's still at 3.8 percent we just got

Friday's job report and it was a very

very uh good report and that's why the

market went up on Friday which was last

Friday so what happened number one we

had non-farm payrolls increased by 223

000 for December that's above the 200

000 estimates so what does that mean

that means the U.S economy is still

creating jobs it created 223 000 jobs in

December

and again if the economy keeps on

creating jobs every month

it's going to be hard to get into a

recession all right next unemployment

rate like I mentioned just now fell from

3.7 to 3.5 so unemployment is again you

know not going up

now the other good news is that wage

growth

is growing less than expected now

remember one of the things that's

causing this High inflation is that

wages are going up too fast and wages

are creating sick inflation right so on

Friday what happened was that wages were

shown to have grown 0.3 percent month on

month and 4.6 year on year which is

still growing wages are still growing

but lower than expected and it's

decelerating so if you take a look at

this shot over here you can see again

year on year change in average hourly

earnings have been decelerating and that

is a great piece of news for the fact

that inflation is beginning to slow down

so again U.S economy is strong but

people say

the FED will have no choice but to keep

raising rates to force a recession in

order to bring inflation down

so that comes to my third forecast and

my third forecast is they don't have to

the FED will probably start to pause or

race slower but they will race less

aggressively because my forecast number

three is that inflation has peaked

and the tenure treasury yield has also

peaked now over here you can see this is

the inflation rate of the U.S year on

year we have peaked and it's beginning

to decelerate right the tenure treasury

yield over here uh you can see Pete last

year and while it's still above this uh

trend line it's beginning to make lower

laws and there's a chance that it may

consolidate but it probably

has a repeat now why is this important

remember I've said this before that the

main reason why the market dropped last

year the bear Market went out not

because of the recession not because of

earnings contraction right companies are

growing their earnings although slower

economies growing the only reason the

stock market went down is because of the

rise of the 10-year treasury yield which

com compresses price earnings multiple

so if the tenure treasury yield can

continue to be flat or go down and

inflation remains

um moderate then this year will be

extremely bullish

so why do I think that inflation has

peaked well all the main drivers of

inflation 2022 have all collapsed right

look at gasoline prices down 40 percent

crude oil down 36 percent and they are

below the pre-ukraine war levels check

it out right so Ukraine war started uh

early in 2022 gas went all the way up

and now it's below 2022 uh start of that

year right same thing with crude oil

prices went all the way up and then

collapsed what else wheat agriculture

right wheat prices are down 45 the

Baltic dry index that measures shipping

and shipping you know High shipping

costs we want the main drivers of

inflation you know shipping prices are

down 55 percent

below the uh 2022 level when it first

started

so my expectation is for core PC

inflation which is the Federal Reserves

preferred uh inflation data I expect it

to slow from 4.7 this year to three

percent by late 2023

another reason why I think inflation is

definitely coming down is because if you

look at the M2 which is the money supply

you can see that it has come down

significantly the rate is the money

Supply Plus inflation and we look at

historically money supply has always

been a leading indicator of inflation

you can see when money supply comes down

inflation comes down money supply comes

down inflation comes down money supply

goes up inflation goes up and now money

supply has really gone on significantly

in fact its biggest decline since the

1960s if I'm not wrong 1960s yeah yeah

like 60 years right biggest decline in

60 years in the money supply so we can

expect again

inflation to really moderate and as long

as inflation moderates the FED does not

have to keep raising rates so

aggressively they may still raise rates

but at a more uh gradual Pace now the

only risk that could cause inflation to

read night is actually China's reopening

as you know that China is now reopening

it's abandoned its covet zero policies

it's open it's borders and now Chinese

people are going to fly all around the

world and consume and buy right so on

one hand that could you know cause oil

prices to go up again that could cause

global demand to go up again that could

Spike inflation up again all right

that's the bad news but on the other

hand by China reopening it is easing the

supply chains so things are moving

faster in terms of the supply chain so

that is deflationary so

the inflationary effect of China

reopening would be counteracted by the

deflationary effect of easing Supply

chains my fourth forecast is that the

Chinese stock market has entered a bull

market and the bull market is only at

its beginning stages thanks for watching

I'll see you guys in part two of this

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cool and may the markets be with you