*LOOKING AHEAD TO 2023: ECONOMIC WOES AND STOCK VOLATILITY -
With a hawkish Fed and weakening employment picture, monthly job losses will create nervousness on Main Street next year
While the employment picture appears decent so far, there are signs that monthly payroll declines could be in the offing. Goldman sees sluggish job climbs by the second quarter of next year, while BofA is much more pessimistic in its outlook. and lower stock and bond prices. Bearish sentiment on financial markets and frustration with the economy are likely to persist. We will go from concerns and worries about inflation to fears of a contracting employment situation.Source: Charles Edwards
But investors should be careful not to assume that the market will trade at recession-level earnings and a trough valuation for too long. If EPS recovers to $230 and the SPX trades with a 17-multiple toward the end of next year, that would still be a positive total return for the year.