LPL Financial Publishes LPL Research's Outlook 2023

Last Edited by: LPL Financial

Last Updated: December 06, 2022

Outlook 2023: Finding Balance image

CHARLOTTE, N.C. – December 6, 2022 – LPL Financial LLC today released the firm’s Outlook 2023 report, in which LPL Research discusses the importance of “Finding Balance” in 2023. The report includes insights and analysis of the economy and markets and is available to all LPL Financial advisors, RIAs and institutions as well as publicly in an interactive digital version and downloadable PDF.

“Equity markets lacked balance in 2022 as the challenging macro environment overwhelmed business fundamentals,” said LPL’s Chief Equity Strategist Jeffrey Buchbinder. “Stubbornly high inflation and sharply higher interest rates were the dominant market drivers, pressuring valuations and inciting fears of recession and falling corporate profits. In 2023, we expect equity markets to find balance between key macroeconomic factors—inflation, interest rates, and Fed policy—and business fundamentals.”

Among the key forecasts and topics discussed in the Outlook 2023 report:

  • Economy: Global economic growth will likely slow from above 3% to somewhere in the mid-2% range in 2023. The longer inflation is uncontained, the riskier the growth prospects. If the U.S. falls into a recession, chances are that it would occur during the first half of 2023 and would likely not be as deep as the 2008 recession, which was initiated by a fundamentally flawed financial market.
  • Stocks: If the stock market is going to appreciate in 2023, a prompt end to the Fed’s rate hiking campaign will likely be a key component. We believe the Fed will pause during the first quarter of 2023 amid an improving inflation outlook and loosening job market. Should that occur, stocks would likely move higher, consistent with history.
  • Bonds: There are a range of scenarios that could play out over the next year. However, given our view that the U.S. economy could eke out slightly positive economic growth next year, 10-year Treasury yields could end the year around 3.5%.

LPL’s Asset Allocation Strategist Barry Gilbert added, “After two years of disruption due to the COVID-19 pandemic, we were searching for some kind of return to normalcy, while at the same time still experiencing the aftereffects of the pandemic. Some of those aftereffects included imbalances created by the fiscal, monetary and public health policies put in place to address the pandemic—and the process of addressing those imbalances has been disorienting at times. If 2022 was about recognizing imbalances in the economy and starting to address them, we believe 2023 will be about setting ourselves up for what comes next as the economy and markets find their way back to steadier ground—even if the adjustment period continues.”

About LPL Financial

LPL Financial (Nasdaq: LPLA) was founded on the principle that the firm should work for the advisor, and not the other way around. Today, LPL is a leader in the markets we serve*, supporting more than 21,000 financial advisors, including advisors at approximately 1,100 institution-based investment programs and at approximately 500 registered investment advisor ("RIA") firms nationwide. We are steadfast in our commitment to the advisor-centered model and the belief that Americans deserve access to personalized guidance from a financial advisor. At LPL, independence means that advisors have the freedom they deserve to choose the business model, services, and technology resources that allow them to run their perfect practice. And they have the freedom to manage their client relationships because they know their clients best. Simply put, we take care of our advisors, so they can take care of their clients.

*Top RIA custodian (Cerulli Associates, 2020 U.S. RIA Marketplace Report). No. 1 Independent Broker-Dealer in the U.S. (Based on total revenues, Financial Planning magazine 1996-2022). Among third-party providers of brokerage services to banks and credit unions, No. 1 in AUM Growth from Financial Institutions; No. 1 in Market Share of AUM from Financial Institutions; No. 1 in Market Share of Revenue from Financial Institutions; No. 1 on Financial Institution Market Share; No. 1 on Share of Advisors (2021-2022 Kehrer Bielan Research & Consulting Annual TPM Report). Fortune 500 as of June 2021.

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Important Disclosures

Please see the LPL Financial Research Outlook 2023 for additional description and disclosure.

The opinions, statements and forecasts presented herein are general information only and are not intended to provide specific investment advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Any forward-looking statements including economic forecasts may not develop as predicted and are subject to change based on future market and other conditions.

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