9 August 2023 - Thoughts on the Market

The past few years have given us a fascinating lesson in just how wrong the “experts” can be when it comes to forecasting. The remarkable call from Jerome Powell that inflation in 2021 would be “transitory” was just one of many noteworthy misses.

Last year, almost every Wall Street analyst got the stock market totally wrong, with the sell-off in equities taking them by surprise. This year, the analysts have again gotten things wrong as the stock market has surged higher, completely shattering their pessimistic forecasts.

The forecasts have been wrong in other areas as well. The “inevitable” recession hasn’t manifested, as consumers have totally stunned the forecasters with their resilience. Growth in the economy has continued to surprise, and there is now a growing consensus that we are headed for a soft landing – a sort of fairy tale ending to a tumultuous period.