Wall Street Expert Predicts "Stock Market Rebound This Year Despite US Tightening... Ukraine Peace Negotiations" (Update)

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[Asia Economy New York=Special Correspondent Seulgina Jo, Reporter Haeyoung Kwon] 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 expected the stock market to hit bottom by mid-year and then experience a rally comparable to that of 2009. He also forecasted that Russia and Ukraine would begin peace negotiations in the second half of the year.

According to Blackstone, the largest asset management firm in the U.S., Byron Wien, along with Chief Investment Strategist Joe Zidle, released a report titled "10 Surprises of 2023" on the 4th (local time) containing these insights. Wien, who has been engaged in investment work on Wall Street for over 50 years, has been issuing 10 predictions each year at the beginning of the year, focusing on financial, industrial, and political issues with over a 50% probability of occurrence since 1986 when he worked as Chief Investment Strategist at Morgan Stanley.

In his 38th report this year, Wien anticipated that the U.S. Federal Reserve (Fed) would continue its tug-of-war with inflation. Instead of considering a pivot in monetary policy, he expected the Fed to raise the benchmark interest rate above the consumer price index, resulting in the real interest rate turning positive for the first time in 10 years. He predicted that the Fed would maintain a more hawkish stance compared to other central banks, leading to continued dollar strength against the yen and euro.

Indeed, the minutes of the Federal Open Market Committee (FOMC) meeting released that day confirmed hawkish signals. Participants stated that "a restrictive policy stance should be maintained until there is confidence through economic indicators that the inflation rate is on a sustained downward path to the 2% target," dashing market hopes for a pivot. The ongoing overheating of the U.S. labor market is also expected to reinforce the Fed's tightening stance. On the same day, the U.S. Department of Labor reported that the number of job openings in U.S. companies in November last year was 10.46 million. Although this was lower than the previous month (10.51 million), it far exceeded market expectations (10 million).

Wien forecasted that despite the Fed's success in curbing inflation, contrary to market concerns, a "mild recession" would occur, with the stock market bottoming out by mid-year and then rising. He specifically predicted that "a recovery comparable to 2009 will begin."

Regarding the war between Russia and Ukraine, he expected peace negotiations to commence in the second half of this year. Wien predicted, "In the first half of the year, bombing, destruction, and casualties due to the war will continue, but in the second half, both sides, burdened by pain and costs, will increasingly recognize the need for a ceasefire and begin negotiations on territorial division."

For the Chinese economy, which is easing COVID-19 lockdowns, he forecasted a 5.5% growth rate this year. He predicted that economic activity in China, which has surged in COVID-19 cases after transitioning to a "with COVID" policy, will normalize this year. He stated, "China will actively work to rebuild trade relations with the West," adding that "this is expected to have a positive impact on global real assets and commodity markets."

Additionally, he expected oil prices to fall to around $50 per barrel this year due to the global economic recession. He projected that increased production in the Middle East and Venezuela, along with the rise of hydraulic fracturing technology for shale gas drilling, would drive oil prices down. However, if economic recovery occurs next year, oil prices could reach $100 per barrel.

He also predicted that Twitter, which has been plagued by controversies since being acquired by Tesla CEO Elon Musk, would normalize within the year. Wien said, "Advertisers are reluctant to support Twitter, and creditors are skeptical due to massive debt," but he forecasted, "Nonetheless, Musk will restore Twitter to a path of recovery by the end of the year."

This content was produced with the assistance of AI translation services.