Schalk Louw | What the investment experts expect from 2023

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Schalk Louw is a portfolio manager at PSG Wealth.
Schalk Louw is a portfolio manager at PSG Wealth.

Schalk Louw looks at what the world's large investment houses are predicting for this year.

And so, 2023 has arrived, leaving behind a very difficult 2022. 

According to the Chinese Zodiac signs, this is the year of the rabbit. But will the tortoise win instead?

I'm sure that most people are familiar with the story about the race between the hare and the tortoise, but for those who haven't heard it, spoiler alert – the tortoise wins by keeping up his slow and steady pace. 

During the recent summer holidays, as usual, I worked through the reports released by most of the large investment houses outlining their outlook for the new year. This year, the companies agreed on more themes than in the past. And the reports seem to agree that this may be a year the hasty hare could very well be beaten by the slow and steady tortoise - yet again. 

Here's what stood out from the investment reports:

Global bonds

This was the most interesting change in opinion compared to the outlook for 2022. Most of the investment companies had a very negative outlook towards global and US bonds in 2022, and it was quite striking to see that most of them now have a positive outlook for 2023.

The overwhelming opinion is that most countries have moved towards the end of the rising interest rate cycle and that the bad news has now been factored into bond prices. Credit Suisse said: "As for financial markets, as inflation peaks and monetary policy reaches restrictive territory, fixed income should become more attractive again."

JP Morgan feels that all the negative news for 2023 has already been priced in and stated that "both stocks and bonds have pre-empted the macro troubles set to unfold in 2023 and look increasingly attractive".

"[We] are more excited about bonds than we have been in over a decade."

We know that the US 10-year bond yield, for example, is still trading at the highest levels seen in more than a decade, but we should always be aware of the fact that rates traded at the lowest levels seen in 50 years between 2010 and 2020. With the great optimism that most of these investment companies are looking at global bonds, you shouldn’t necessarily disregard this fact.

US 10-year note bond yield (%)
US 10-year note bond yield (%) Source:

Economic growth and recession

Not all companies agreed on this topic, but the general view was that if the US does enter a recession this year, it should be swift and less intense. 

Citi Global Wealth expects a mild recession in the US, but believes regions such as the eurozone may be more heavily impacted. 

Wells Fargo expects a "moderate" recession in the US and global economies, followed by a recovery in the second half of the year, which could extend into 2024. 

Some – like Goldman Sachs - believe the US could sidestep a recession altogether.

Still, economic growth should slow this year, and most investment companies agree that the IMF’s global growth forecast of 2.7% for 2023 will likely not be achieved. 

"2023 may well be one of the slowest years for global growth in decades," Barclays says. It expects the world to grow at 1.7%.


There were mixed views on inflation as well. The consensus view is that it may have peaked and could start to drop to lower levels in 2023. Still, is not likely to reach levels seen before 2020. 

But Deutsche Bank believes that while inflation will ease, it will stay well above central banks' target levels.


China was a topic that every report addressed in detail. While no one predicted a V-shape recovery, optimism regarding China’s re-opening following Covid-19 lockdowns was apparent. 

Goldman Sachs believes that China is likely to grow slowly in the first half of 2023 as an April reopening initially triggers an increase in Covid-19 cases that keeps caution high. But growth should accelerate sharply in the second half.

"As China’s zero-Covid policies begin to moderate, combined with a weaker dollar, that could make China an intriguing equity area for 2023," Morgan Stanley says.

US equities

At the start of 2022, there was a big split in views among investment companies about the outlook for US shares. Some believed the shares were overvalued and would suffer during 2022, while others were still very optimistic about US shares. This year that is not the case. 

Most investment companies are not positive at all about US shares for 2023 and feel that better growth will most likely be found in other areas. HSBC was among the minority of companies that preferred US stocks over that in the Eurozone and UK. 

In contrast, most of the other companies were more downbeat, with Vanguard maintaining that "stretched valuations in the US equity market in 2021 were unsustainable, and our fair-value framework suggests they still don’t reflect current economic realities".

Global equities

This topic brings me back to the tale of the tortoise and the hare. Few investment companies forecast an excellent start for global equities in 2023, with most predicting a slower recovery towards the end of the year. Deutsche Bank captured it best in their report: "2023 is likely to be an acceptable year for equities, but not a great one. Positive returns will be driven by some modest price/earnings expansion and dividends – but earnings per share will be stagnant. Everyone agrees that volatility is likely to remain high and that investors would have to be patient."

Many investment companies believe emerging markets offer more investment opportunities. 

"The broad-based sell-off in equity markets has left some stocks with strong earnings potential trading at very low valuations; we think there are opportunities in climate-related stocks and the emerging markets," according to JP Morgan.


There are mixed opinions about which commodities may perform well in 2023. However, the general consensus is that commodities cannot be disregarded this year. 

UBS believes commodities still have a place in 2023 portfolios, seeing commodities "as attractive both on an outright basis and for the hedging role they serve in multi-asset portfolios". 

In fact, Wells Fargo believes the "bull super-cycle is still young" in commodities. 

The US investment giant also shares the opinion of many other investment companies that investors shouldn’t be too optimistic about the US dollar, which is something South African investors should consider before exchanging their rands for US dollars. "The dollar's 2022 ascent to a 20-year high was gold's most potent negative, but the 2023 flattening and then reversal lower in the dollar's value that we expect should relieve some pressure on gold," believes Wells Fargo.

Most investment companies’ preference still lies with energy and oil producers.

I wish you all an excellent 2023. May this year bring considerably more joy than 2022. 

Schalk Louw is a portfolio manager and strategist at PSG Wealth Old Oak

News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24. 

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