2023 Inflation Outlook to Shape Stocks' Path After 2022 Surge
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Inflation trends in 2023 will determine if stocks continue to thrive after a 24% S&P 500 surge this year.
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Analysts outline 3 scenarios - continued growth favors cyclicals; high inflation aids risk-off assets; sharper disinflation brings more Fed cuts and stock gains.
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Key is if core inflation falls to 2.4% by end of 2024 as Fed expects; faster drop brings more rate cuts.
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Lagging small caps should continue playing catch up into year end.
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Further S&P gains may narrow with high sentiment, tight credit spreads; better to play rotations.