Shares down in 2023

The effects of the recession are reducing earnings expectations

WHAT HAPPENS
At the European level, the ECB has confirmed its willingness to carry out a further decisive tightening on rates, despite countries such as Italy that will pay a high cost of public debt.

WHAT TO EXPECT
Analysts from Goldman Sachs and Bank of America are convinced that in 2023 European stock exchanges will undergo a correction up to -15% due to lower earnings per share. This effect is mainly due to the effects of the upcoming recession and the further increase in interest rates.
That expectation is consistent with the US market: indeed, for the fourth quarter of 2022, Factset reported a decline in S&P 500 earnings of -4.6%, which marks the first large drop in earnings per share since 2020 (-5.7% ).
The stock market therefore remains overvalued.