The roast of Outlook Research. Part 2
Hi friends! Michael Hypov here ✌️
I continue to roast reviews for 2023. If you have not read the first part, then be sure to hop on the link. There is a lot of useful and unique information there, which, I am sure, cannot be found in such a concentrated form anywhere else.
Ready to look into the future? ;) Then let’s go.
Part 2. Introduction.
Here, I will make a summary on 5 Market Outlook Research, these are:
(copies of the original reports of all listed companies can be found here)
The first impression of the outlook from Accenture is that it is very pretty. I don’t even know what was more interesting — reading it or looking at it. It is filled with lots of beautiful AI-generated illustrations that you can look at for a long time. I posted an example above, but I recommend that you follow the links and see the full version of the report.
In its report, Accenture identifies 5 areas that, according to the consulting company, will have the greatest impact on people’s lives in the coming years:
1. I will survive
People will increasingly express their disagreement with injustice, risking personal loss. Accenture expects to see more protests related to economic instability, human rights and government politics. Companies need to show more empathy and follow the changing priorities of consumers.
2. I’m a believer
Right now, Accenture is watching three trends converge:
- Formation of communities of interest, the tendency to assign oneself to a certain social group
- Collecting NFTs and other digital assets.
This merger creates a massive synergy effect, which can be described in the following theses:
1/ The trend to merge social networks, public organizations and social groups with Web3 technologies will continue to gain momentum.
2/ Web3 space in 2023 will be a new milestone in the meaningful interaction of international brands with their most loyal customers.
3/ In addition to rational investment, the emotional investment of clients will develop, nourishing their desire to be involved in the idea or philosophy, the mission in which they believe. Being involved in something significant and becoming part of the overall success becomes more expensive than monetary gain.
4/ Communities are becoming the core of any future company. First, a community united by common interests is formed, and only then a brand, service, product is created on this basis. Thanks to these trends, DAOs (Decentralized Autonomous Organizations) and Web3 market will receive a new branch of development.
3. As it was
The pandemic has triggered a transition to remote work, which has led to the loss of the intangible elements of office life. However, the process of returning to the office was unsuccessful due to the lack of balance between work and social activities. The classic office space creates a lack of contact with the outside world and negatively affects creativity and innovation.
In this section, I can highlight the following important thoughts:
1/ The tension between employer and employee will continue to escalate.
2/ Companies need to rethink the design of the workplace to take into account both the tangible and intangible values and desires of their employees.
3/ People will return to the office if the workspace is conducive to lively communication, community formation and building relationships within the team.
4/ Team-building events and events acquire higher value.
5/ Companies will invest more in developing hybrid work models and workspaces, including for remote work.
4. OK, Creativity
This thread is entirely dedicated to discussing the renaissance of AI technologies and generative neural networks. The main idea is that AI with deep learning models will have a huge impact on all areas related to human creativity (creation of texts, videos, music, pictures, sounds, etc.).
Since I wrote a lot about this in previous reviews, I will not repeat myself, let me just highlight the main original thoughts:
1/ AI makes creativity accessible to everyone. Competition among creators (creators of a creative product) will increase enormously.
2/ The quality of the creative product will be the subject of growing controversy.
3/ The massive use of AI will inevitably raise issues of legal and ethical protection of content creators and consumers.
5. Signed, sealed, delivered
Accenture claims that we are in a digital security crisis regarding the safety and management of personal data. More and more people are paying attention to the problems of personal digital security and are concerned about the possibility of complete control and management of their personal data and its protection.
Here are some of the main ideas of this section:
1/ People will be able to take back control of their personal data through Web3 digital wallets, tokens and NFTs.
2/ The level of protection of personal data in the development and implementation of new technologies will be of decisive importance. Blockchain technologies will receive a new impetus for development as a technology that provides personal control over their personal data.
3/ The migration from Web2 to Web3 will be massive and will have an impact on many companies’ businesses and their relationship with the consumer as the power to control personal data shifts from companies to the customer. Companies need to be ready for new trends and rethink their loyalty programs and customer relationship strategies.
Apollo Global Management
The author of this report is Torsten Sløk, Apollo’s chief economist. He did an excellent macro analysis of the US market. The focus of the report is on the fundamental indicators of the financial system and the US economy, on the health of which the state of the global economy certainly depends.
It will be difficult for non-economists to read it. I tried to describe the main theses in an accessible form:
- Inflation peaked in June 2022 and is on a downward trend driven mainly by the commodity sector.
- The decline in inflation occurs without a sharp rise in the unemployment rate, which increases the likelihood of a soft landing in the US economy.
- Investments in renewable energy and green energy will continue to rise due to rising energy prices.
- Private capital market opportunities will remain strong in 2023 even in the absence of public market funding.
- Lending to large corporations will provide stability in the face of uncertainty.
- Demand for real estate and infrastructure facilities will be supported by inflation protection measures. The price of real estate will be relatively stable.
- The Fed’s rate hike is starting to cool the US economy. We will see the negative effect of these measures in the near future.
To sum up the main idea of the report, Torsten does not expect economic shocks and is inclined towards a gradual slowdown in US economic growth.
Bank of America
As with Apollo’s report, BofA’s Outlook focused primarily on US macroeconomic analysis and a bit on the global economy. The format of the report is made in the form of a video interview with five Bank of America top-level experts.
Here are the main points:
- Resilience in consumer demand and a strong labor market are two big surprises in 2022 and will provide support in 2023.
- The fall in oil prices will be a positive factor for 2023.
- There are three trends in the global investment policy of companies: climate change, de-globalization, inequality and inclusiveness.
- Inflation is expected to come down in 2023, but too late to avoid a recession.
- Macroeconomic indicators say that the recession will be mild.
- The recession is expected to start between 2023 and 2024.
- Investors will prefer quality actives with cash flow, profits and a quick return on investment.
- The favorite sector of the economy among investors for 2023 is energy.
- Small-cap stocks may outperform large-cap stocks as part of a new bull trend.
- The factors that determine the end of the cyclical bear market remain to be seen.
To sum up the main idea of the interviews, there will be no economic catastrophe, but a recession is inevitable. The good news is that it will be easy and will end fairly quickly. High volatility is expected in the markets, but in the event of a bullish reversal, the markets will quickly recover.
The guys at Binance did a really great job. The 120-page report analyzes in detail the events of the past year and provides an analysis of the main long-term trends in 2023. The text is quite simple, without technical difficulties and will be understandable to most users of crypto. There are also a lot of infographics and interesting charts, which, with a cursory glance, can already provide a lot of useful information. I recommend everyone to come here and devote a couple of hours to self-study.
For those who do not have so much time, the main thoughts are fixed below:
- The health of the global economy will continue to have an impact on the cryptocurrency industry. Moreover, the correlation with traditional markets will continue to increase.
- DeFi and NFT projects will go beyond the crypto ecosystem.
- The transparency of staking and farming will increase. A new wave of mass adoption of DeFi tools will begin.
- Growth in demand for NFTs with utility capabilities will continue. The focus will be on innovative NFTs with multiple real-world use cases to address specific business needs.
- The quality of blockchain games will continue to grow. The main focus will be on the gameplay of the game.
- The trend to regulate the cryptocurrency space will continue to gain momentum. The rules will become clearer and the regulation more transparent.
BlackRock experts have compiled perhaps the shortest and most informative outlook for 2023. At the same time, I can also call it one of the most unusual. The guys outlined their vision of the US markets in terms of strategic and tactical investment. To simplify the visualization of this approach, a scale for assessing the market in dollar terms was presented. Anything below the average means that the market is undervalued, and anything above means that the market is overvalued.
The totality of assessments on this scale of the Capital market, the Credit market, short-term and long-term bonds determines the strategic position of the entire portfolio of markets in the quadrant “Are losses taken into account? / Attitude towards rice”. This matrix is shown above and we can see that BlackRock considers the current position of the markets in the phase of the beginning of the crisis — the quadrant of flight from risky assets, but still too high prices for the assets themselves.
Now let’s jump straight to the conclusions about 2023 based on this conclusion and macroeconomic analysis:
- 2023 will be a year of high volatility and rapid change in behavior. Flexible, quickly adjusted and changed portfolios of assets will look more advantageous and will show a better result.
- BlackRock is in solidarity with colleagues and also considers a recession inevitable, but predicts the beginning of an exit from it this year.
- The geopolitical environment is the most complex since World War II. It will continue to play a strong role in macroeconomics. Tendencies to divide into competing blocs and the desire for de-globalization and self-reliance will intensify.
- The growing proportion of older people and the trend towards an aging population will continue. This factor will continue to have a negative impact on economic growth.
- Inflation growth rates will stabilize, but it will still be higher than in previous years.
Friends, I am finishing the second part of the reviews. It was mostly devoted to macroeconomics, but this does not diminish its significance. Macroeconomics, geopolitics and the cryptocurrency market are inseparable from each other. Moreover, the integration of cryptocurrencies into the main macroeconomic institutions continues to increase, which, on the one hand, is a positive signal of the upcoming truly massive adoption of cryptocurrencies. On the other hand, the growing ties between the cryptocurrency market and the global economy transfer the problems of the latter to the entire Web3 space.
My friends, a lot of work has been done. Thank you very much for reading this to the end. Please support by reposting, liking and commenting!
All original copies of report versions in one place for convenience have been collected here. I would be glad if you drop in and try to study them yourself. If I missed something or did not retell it correctly, then please indicate in the comments.
It is important to make a small disclaimer! All information provided here is provided for educational purposes only and in no way constitutes investment recommendation, advice, or a call to action.
Please take care of yourself and your money!