Investors suffered a brutal 2022, with the S&P 500 tumbling 19% as the Federal Reserve cranked interest rates higher to smother inflation. But 2023 may offer up more misery, with a looming recession providing another dose of risk, according to Morgan Stanley chief U.S. equity strategist Michael Wilson.
The S&P 500 could fall to as low as 3,000 points, a decline of more than 20% from its current trading level of roughly 3,900 points, Wilson said in a YouTube discussion last month about his 2023 outlook. The main reason for that bearish forecast: U.S. corporate profits are likely to slump as the economy slows and perhaps enters a recession.