This analyst, who is forecasting a double-digit decline in shares in 2022, now says Jeff Bezos may return to the helm of Amazon

If Tuesday was any indication of how the market will behave this year, buckle up, looks like it’s going to be a wild one. The Dow Jones Industrial Average DJIA, -0.03%, had a trading range of 537 points, although the blue-chip index was down just 11 points at the close.

It’s still early enough in the year to look at forecasts for 2023, so this time we’re taking one from an analyst who got the market right at the end of 2021. “The S&P 500 is going to have its worst year since 2008,” he told Michael Batnick, director of research at Ritholtz Wealth Management. “I predict it will fall by more than 15% this year. The combination of high multiples, high inflation, supply chain issues and the Fed raising interest rates will prove too much for investors.” The S&P 500 SPX, -0.40%, fell 19% last year.

Of course, not all of his predictions have come true — for example, he said the Fed would cut rates by the end of the year — but that’s still a better track record than many. So what does he expect for 2023?

Jeff Bezos, in the style of Bob Iger at Walt Dsiney, will come back to lead Amazon.com AMZN, +2.17% after the stock’s 50% decline last year, he estimates. “Jeff Bezos has spent 27 years at Amazon and has been away for less than two years. In 2023 he’ll tow a Bob Iger and return to stabilize the ship,” says Batnick.

That’s not crazy talk given Amazon’s stock price struggles, although Andy Jassy was, of course, unfortunate in timing to start as CEO and fire consumers from their homes just five months before the first vaccines arrived. “Is Amazon in a lousy business or are they doing a lousy job running it,” asked Laura Martin, an analyst at Needham, in a note from late December, in which she forecast just 2% operating margin for the fiscal year.

In this regard, Microsoft MSFT, -0.10%, has just been downgraded by UBS, in part on concerns that its Azure cloud business, which competes with Amazon’s AWS, is flagging due to maturing rather than just macro headwinds.

Batnick broadly expects the tech sector to continue layoffs — which he wrote ahead of Salesforce.com CRM, +1.65% announcing 10% job cuts — and for value to continue to outpace growth.

Some of his other predictions: Bonds will hold their own as a diversifying investment; Bitcoin BTCUSD, +0.98% will double; Gold GC00, +1.03% set to make new all-time high; and stocks will gain double digits. “With hopefully the inflation spike behind us, a consumer still in good shape, and an investor class consistently negative, it wouldn’t take much of an upside surprise for stocks to take off,” he says.

caveat, however. “These are my best guesses as to what will happen over the next year, and I look forward to reading them again in 12 months, incredulous that I could be so wrong about so many things,” Batnick writes.

The market

US stock futures ES00, +0.31% NQ00, +0.51% higher ahead of the data flood. Dollar DXY, -0.42%, slipped and the yield on 10-year Treasury TMUBMUSD10Y, 3.686%, was 3.70%.

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The buzz

Tesla TSLA, -12.24%, will be in the spotlight after falling 12% to its lowest level since Aug. 13, 2020 on Tuesday. Cathie Wood’s ARK Invest on Tuesday bought $20 million worth of Tesla stock, according to the company’s daily disclosures. Broader automakers are expected to report vehicle sales for December throughout the session.

It’s a big day on the economic front. The Institute for Supply Management’s Manufacturing Index is scheduled to be released at 10:00 am Eastern Time, the same time that the latest jobs report is released.

Minutes of the Federal Open Market Committee’s last meeting are due to be released at 2pm – remember that Chairman Jerome Powell was very combative after the meeting so the summary may not reflect his tone.

In France, inflation fell to a three-month low in December as energy prices in Europe eased on the back of a warmer-than-expected winter.

The spectacle of who becomes speaker of the House of Representatives could continue after Kevin McCarthy saw his bid rejected three times by dissident Republicans.

According to The Information, Microsoft intends to create a version of its Bing search engine powered by ChatGPT software, which would pose a challenge to Alphabet’s Google GOOGL, +1.01%.

The best of the web

The website Unusual Whales released its 2022 Congressional Stock Trading Report, which finds that both Democrats and Republicans have outperformed returns over the past year.

The head of Saudi Arabia’s wealth fund has been subpoenaed in a lawsuit over a tweet by Elon Musk.

Moody’s is not warning of a recession but of a “slow recession”.

top ticker

Here the most active stock tickers were as of 6 a.m. Eastern.

ticker	security name
TSLA, -12.24%	Tesla
GME, -6.83%	GameStop
AMC, -3.44%	AMC entertainment
MULN, +12.41%	Mullen Automotive
AAPL, -3.74%	Apple
NO, -1.23%	no
BBBY, -7.97%	bed bath beyond
AMZN, +2.17%	Amazon.com
BABA, +4.42%	Ali Baba
NVDA, -2.05%	NVIDIA

The graphic

Ahead of the Fed minutes, this chart by Fidelity Investments strategist Jurrien Timmer shows the difference between market and central bank expectations of where rates are headed. “The risk here is that the Fed is right and markets wrong in forecasting the policy path in 2023, and that financial conditions will remain tight for longer,” he says. He says the recent rebound from the mid-October low could not only be justified if interest rates stay high longer than investors expected.

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