Nordic Strategy 2023 Outlook - the improbable trinity
Equity market pricing implies no material cuts to consensus earnings, inflation below 3% by end-2023 and lower TIPS rates. Given the linkages between inflation and earnings, at least one of these is likely to disappoint. Even if both earnings and inflation expectations are achieved, Quantitative Tightening and the risk of central bank policy mistakes may keep TIPS rates higher than expected. 2022 posted dismal returns for bonds and equities. In 2023, we expect equities to underperform fixed income and recommend an underweight (previously neutral) equity market exposure over the coming months.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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