Byron Wien's Top 10 Predictions for This Year
"Mild Recession Despite Fed Rate Hikes"
China Achieves 5.5% Growth Rate... Twitter to Normalize by Year-End
[Asia Economy Reporter Kwon Haeyoung] Byron Wien, Vice Chairman of Blackstone, known as the "Wall Street Oracle," predicted that the stock market will sharply rebound as a mild economic recession occurs this year due to the U.S. monetary tightening. He forecasted that the stock market will bottom out by mid-year and then experience a rally comparable to that of 2009, and that oil prices could surge from $50 this year to $100 next year as the economy recovers. He also anticipated that Russia and Ukraine will begin peace negotiations in the second half of the year.
According to Blackstone, the largest asset management firm in the U.S., Byron Wien and Chief Investment Strategist Joe Zidle released a report titled "10 Surprises of 2023" on the 4th (local time) containing these insights. Wien, who has worked in investment on Wall Street for over 50 years, has been issuing ten predictions each year since 1986?when he was Chief Investment Strategist at Morgan Stanley?focused on financial, industrial, and political issues with over a 50% probability of occurring.
In his 38th report this year, Wien expected the U.S. Federal Reserve (Fed) to continue its tug-of-war with inflation. Instead of considering a pivot (a shift in monetary policy direction), the Fed is expected to raise the benchmark interest rate above the consumer price index, resulting in real interest rates turning positive for the first time in 10 years. He predicted that the Fed’s more hawkish stance compared to other central banks will sustain the dollar’s strength against the yen and euro.
Despite market concerns, Wien forecasted that the Fed’s success in curbing inflation will lead to a mild recession, with the stock market bottoming out by mid-year and then rising. He specifically predicted that "a recovery comparable to 2009 will begin."
He also predicted that Russia and Ukraine will start peace negotiations in the second half of the year. Wien stated, "In the first half, bombing, destruction, and casualties will continue due to the war," and "In the second half, both sides, burdened by pain and costs, will increasingly feel the need for a ceasefire and begin negotiations on territorial division."
Furthermore, he expected China’s economy, which has eased COVID-19 lockdowns, to achieve a 5.5% growth rate this year. This forecast reflects the normalization of China’s economic activities following a surge in COVID-19 cases after transitioning to a "With COVID" policy. He added, "China will actively work to rebuild trade relations with the West," and "this will have a positive impact on global real assets and commodity markets."
Due to the global economic recession, Wien predicted that oil prices will fall to around $50 this year. He cited increased production in the Middle East and Venezuela, as well as the rise of hydraulic fracturing technology in shale gas drilling, as factors driving oil prices down. However, he projected that as the economy recovers in 2023, oil prices could reach $100 next year.
Wien also forecasted that Twitter, which has been plagued by turmoil since being acquired by Tesla CEO Elon Musk, will normalize within the year. He said, "Advertisers are reluctant to support Twitter, and creditors are skeptical due to massive debt," but "nevertheless, Musk will steer Twitter back onto the path of recovery by the end of the year."
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