6 min read

Investing in 2023: What to watch for 👀

From green energy and space tourism to crypto cops and TikTok blocks, we’ve gazed into the crystal ball to see what might be the prominent investing themes investors could watch out for in 2023. Plus we compare our predictions from last year against what actually happened.
Published on
January 31, 2023

Here at Hatch we’ve polished off our crystal ball once again to gaze into the year ahead. Last year we took a shot at a coupla prominent themes to watch and reckon we landed pretty close to the target. Inflation? Tick. In fact, inflation hit a four decade high in the US. Soaring inflation brought rising interest rates which led to something else too: Wall Street’s worst year since 2008. 😭 Yep, our call for ‘potentially choppy waters’ may have been an understatement!

Our theme of an EV sales boom got a big tick, with worldwide EV sales surging 58% in 2022 according to Bloomberg (not to mention exponential growth here in Aotearoa!). It turned out to be less ‘robot delivery revolution’ than robot work in progress, however, with Amazon (AMZN) and FedEx (FDX) powering down their robot delivery projects. And while the metaverse may have felt like a meta-fizzer, gaming levelled up in 2022, with a record year for video game mergers and acquisitions (M&A). Half a point.

So, what could be in store for us in 2023? While divining the future is always tricky, we think there are key themes to watch in 2023, with plenty of signs for optimism shining through. Here’s what we’ll be keeping an eye on in the year ahead.

Could we go from inflation infatuation to recession obsession?

Ah, the economy. One minute we're getting pumped by inflation and rocketing prices and the next it seems like we are hurtling towards a recession. It's like a game of whack-a-mole, except instead of cute fuzzy toys, it's our financial future on the line. 

We’ve been hearing murmurs of a recession since early last year, when the US didn’t officially sink into recession, but it suuuure started to feel like one. In 2023, be prepared for the recession chatter to become even more of an obsession. That’s because we may expect to start seeing more impact of rising interest rates flow through the economy, like the way a wake spreads behind a slow moving container ship.

In a recession, economies slow down and unemployment can rise. People typically spend less money too, so some companies might see lower profits. People (and companies) with a lot of debt might even start to struggle as the weight of interest costs rise. This can create a volatile environment for investors, with share prices moving sharply higher or lower in response to news.

The silver lining? With so much early talk of a potential recession, there is more time for people to save and prepare. That might be enough to help soften the blow if a recession does strike.

Watch for the US to get its green (energy) on! 💚

Speaking of inflation, the new US Inflation Reduction Act (IRA) could become a ‘BFD’ for some electric vehicle (EV) and renewable energy companies in 2023. The act hopes to charge up EV sales by providing investment tax credits in the US to encourage consumers to buy new ‘clean energy’ vehicles that are assembled domestically.

The act also offers a bright spot for solar. An extension to investment tax credits for new solar installations and new incentives to encourage stand-alone energy storage (aka batteries) has been called a game changer for US renewable energy. The US Energy Information Administration is also forecasting battery storage capacity to more than double in 2023.

Will China’s reopening reignite ‘revenge spending'?

It’s the Lunar Year of the Rabbit, and it’ll be the first time in nearly three years that Chinese travel bunnies and adventure seekers can go forth and explore as China emerges from the safety of its Covid burrow. Not only could Chinese consumer spending help to boost sales of luxury goods, but Chinese travellers could be set to hop aboard the mother of all ‘revenge travel’ trends in 2023, once the passports have been updated, that is. Chinese travellers spent a massive US$255 billion abroad pre-pandemic according to CitiGroup (C) and with a possible recession on the cards in many countries, Chinese tourists arriving at their borders could be ideal timing. 

Could space tourism finally blast off in 2023? 🚀

Strap yourself in, because 2023 could also be the year space tourism finally gets off the ground. That is, if Virgin Galactic (SPCE) can work their magic. Ever since the company sent billionaire founder Richard Branson to space in 2021, the countdown timer has been paused on our promised trips to the edge of space as the company suffered repeated delays. That could change later this year, with the company still hoping to head for the heavens in the second quarter of 2023. Ideal timing for you curious Geminis.

Watch for more crypto cops on the beat

Will crypto prices thaw in 2023? Or will ‘crypto winter’ turn into a frosty ice-age? 🥶 Who knows!? But one thing is for sure. After spectacularly crashing down to earth and wiping out some of the biggest players in the crypto industry last year (Three Arrows! BlockFi! FTX!), it would be fair to expect a new focus on the rules and regulations that aim to protect crypto-maniacs.

In the US, The White House is pushing regulators to redouble their efforts to aggressively pursue investigations against dodgy practices in crypto and wants to bring in new safeguards to protect investors, so watch out for more crypto cops taking to the digital beat.

Could the clock be ticking for TikTok in 2023? ⏰

It might have been the most downloaded app in the world last year (and the fastest growing search site), but there are increasing calls from the US to stop the clock on TikTok. Why? Do they hate fun, dancing and giant chocolate giraffes?? Not exactly, but some politicians think it’s time to ban the app after the FBI stopped scrolling dance videos and became concerned that TikTok’s Chinese parent company, ByteDance, could be spying on users.

The ball may already be rolling. The US government has started banning the app on national security grounds, while a separate bill has been proposed to ban the app in the US altogether. Sure, we might get back 90+ minutes a day, but good luck explaining a ban to US teens.

Stay positive, but stay prepared

There is plenty to stay positive about as 2023 unfolds. Although a recession could create challenges for companies and investors to navigate, temporary market changes needn’t discourage you from your goals. Stay positive, stay prepared and stay on the lookout for opportunities that 2023 might bring.

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We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

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