- The US economy will avoid a recession in the first half of 2023, Evan Brown says.
- But a portfolio manager at UBS AM isn’t overly excited about the stock market’s prospects.
- Still, opportunities exist under the surface of the market — and around the world — he thinks.
Despite warning signs like an inverted yield curve and declining manufacturing activity, Evan Brown doesn’t see a recession in store for the US economy in the first half of 2023.
Job gains and wage growth are still too strong, says the portfolio manager and head of multi-asset strategy in the investment solutions team at UBS Asset Management.
“It’s going to take a lot to just fall off a cliff,” Brown said at a media roundtable event at UBS in New York on Wednesday. “The argument here is not that we’re going to see this surge in global growth, but it’s just that the economy hangs in, and hangs in for longer than people expect.”
While Brown is optimistic about the state of the economy relative to the sizeable camp on Wall Street that sees a recession ahead, he doesn’t expect US stocks, broadly speaking, to deliver big returns in 2023 after entering a bear market in 2022.
Growth stocks, which make up a large percentage of the S&P 500, still look unfavorable to Brown given that interest rates will probably stay higher through 2023. Growth stocks, which are more focused on long-term growth and therefore command higher valuations, typically benefit from a low cost of borrowing and the weak competition in the market that lower bond yields bring. Those boons to performance are now gone.
But Brown does see opportunities under the surface of the market and in other parts of the world.
5 places to invest in 2023
In the US, given his aversion to growth, Brown is bullish on value stocks.
“You think about how much money went into growth stocks, in particular mega-caps over the last decade-plus, in a certain economic…
Read complete post here: