The United States has one of the largest and most complex economies in the world. It is a mixed economy that combines elements of capitalism and government regulation, and it is characterized by a high level of productivity and a highly developed infrastructure.
One of the key factors that has contributed to the strength of the United States economy is its highly educated workforce. With a highly skilled and highly motivated workforce, the United States has been able to develop a wide range of industries, including technology, finance, and healthcare, that have driven economic growth and created millions of jobs.
Another key factor that has contributed to the strength of the United States economy is its abundant natural resources. The country is rich in minerals, oil, and natural gas, and it has a highly developed infrastructure that allows for the efficient extraction and distribution of these resources.
The United States also has a highly developed financial sector, which has been a key driver of economic growth and stability. With a wide range of financial institutions, including banks, investment companies, and insurance companies, the United States has been able to provide access to capital for businesses and individuals, allowing for investment and economic growth.
In recent years, the United States economy has faced a number of challenges, including the impact of the COVID-19 pandemic and the associated economic slowdown. The pandemic has caused widespread job losses and business closures, and it has had a significant impact on consumer spending and confidence.
However, the United States government has responded with a series of fiscal and monetary policies aimed at supporting the economy and stabilizing markets. This has included measures such as direct payments to individuals, loan guarantees for small businesses, and low interest rates to encourage borrowing and investment.
In addition to these short-term measures, there is a growing focus on longer-term economic growth and stability. This includes efforts to invest in infrastructure, education, and research and development, as well as initiatives to support innovation and entrepreneurship.
Despite the challenges facing the United States economy, it remains one of the largest and most dynamic economies in the world. With its highly skilled workforce, abundant natural resources, and well-developed financial sector, the United States has the potential to continue to drive economic growth and prosperity in the years to come.
The Rebound Is Coming, And It Could Be Epic
In 2022 is ending, we’ve seen some of our favorite tech stocks drop by 50-75%.However, despite the selloff, the top seven tech companies still account for about 20% of the S&P 500’s weight.
Let’s be honest. 2022 was a “challenging” year. From peak to trough, the S&P 500/SPX (SP500) dropped by approximately 28%, with some of its most significant components experiencing sharp declines of 50% or more during this downturn. Here’s how our favorite technology companies faired during the 2022 bear market phase (peak to trough):
- Apple (AAPL): down by 32%
- Microsoft (MSFT): down by 37%
- Alphabet (GOOG) (GOOGL): down by 45%
- Amazon (AMZN): down by 52%
- Meta Platforms (META): down by 75%
- Tesla (TSLA): down by 75%
- Nvidia (NVDA): down by 65%
Progress On Inflation
CPI inflation (TradingEconomics.com )
CPI inflation peaked at 9.1% around mid-2022. This level is the highest inflation the U.S. has seen in more than 40 years. However, we’ve made significant progress as inflation has declined significantly, more than expected, and is floating around 7% now. As the Fed’s tightening policy continues impacting prices, inflation should drop further in early 2023 and may normalize by around the middle of next year. As inflation continues moderating, the Fed should become more accommodative, leading to a possible pivot before the year ends.
The Bottom Line
Tech was the leading segment in the robust bull market leading up to its 2021 peak. Then, as the epic drop became a reality, technology stocks got obliterated in 2022. The downturn even dragged the best and brightest companies to highly oversold levels. Significant opportunities in our favorite tech stocks for the next bull market are here now and could increase in Q1 2023. While we could see more volatility in the coming months, there is likely limited downside in quality big-cap tech stocks. Moreover, the best-quality tech names will likely become the leaders in the next bull run.
Therefore, I have significant positions in Amazon, Alphabet, Meta, Tesla, Nvidia, and other leading tech stocks. Moreover, I will increase my positions if there is more downside in the coming weeks and months. These and other tech stocks are the core holdings in my All-Weather Portfolio, and I expect their stock prices to be significantly higher one year from now.
2023 Year-End Price Targets
- Apple (AAPL): $150-180 = 16-39% upside
- Microsoft (MSFT): $270-300, = 13-26% upside
- Alphabet (GOOG) (GOOGL): $120-140 = 35-60% upside
- Amazon (AMZN): $120-150 = 45-80% upside
- Meta Platforms (META): $160-200 = 35-68% upside
- Tesla (TSLA): $200-250 = 65-107% upside
- Nvidia (NVDA): $180-220 = 25-50% upside
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