This scenario would have to occur for markets to continue to rise. Is it likely?

It is not only the classic doomsayers like Burry who fear a recession and a big drop, but also more positive investors. Despite this, the markets are still rising. But is this just a false signal? What needs to happen for growth to continue despite all the negative predictions?

This is the scenario that would have to happen for market growth to continue

The market has had a great year so far in 2023, but that won't last forever. After an exceptionally strong January, the S&P 500 index rose by a surprising amount. Technology has done surprisingly well, as have cryptocurrencies, and some are hoping that the Federal Reserve 's efforts to raise interest rates will start to lose a little bit of momentum. In other words, investors are feeling optimistic, less risk averse and less worried about the economic slowdown.

Since the beginning of the year, the index has gained less than 8%

But experts say there is plenty of evidence that the rally may continue - for some time. Not forever, but there is a hint of positivity. Stifel's market strategist, Barry Bannister, thinks it could climb to 4,300 points by spring.

Ari Wald of Oppenheimer even thinks the S&P index will actually get to 4,600 points in the first half of the year, which would be a 12% increase over And it would also slowly but surely attack last year's highs.

The odd thing is that the market is being dragged down by technology stocks, which are associated with greater risk appetite and more optimism about rates and the economy. But the fall may be all the greater. Ed Yardeni, president and chief investment strategist at Yardeni Research, expects the Fed may raise interest rates another three-quarters of a point to 5.25% by mid-year. While rates won't fall this year as some investors hope, he says the economy will remain resilient with borrowing costs at that level. That's an interesting view indeed.

Rates at 5.25 would already be hitting all-time highs. Source

The bad news is that all good things come to an end. And even Bannister knows it. The forecast for the second half of the year is not so positive. Plenty of risks are piling up for the end of 2023 - from the coming economic slowdown to even harsher Fed rate hikes. Or heaven forbid - that inflation starts to kick in again. That could spook the Fed, and we know what would happen...

Inflation is falling. But nowhere does it say it will stay that way. Source

Even Yardeni thinks the S&P 500 will likely have to breathe a sigh of relief when it reaches its 4500 target - despite his belief that higher potential gains in 2024 will kick off a classic santa rally that will carry the index to a record 4800. Well I'm curious to see what 2023 will bring.

Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and other sources. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.

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