In today’s top stories, SpaceX is named one of Forbes’ most-anticipated tech IPOs of 2023, Asian stocks are tipped to grow following China’s economic reopening, and analysis by CNBC Pro tips mid-cap stocks for growth. Elsewhere, demand for EV parts accelerates, while hedge fund Janus Henderson beats the S&P 500 when it comes to 2022 returns.
History shows stocks could rise in 2023
The stock market is known for its boom-bust cycles, and their recurring nature means history could repeat itself in 2023. Analysis by CNBC Pro found that the MSCI World Index has risen by an average of 18.4% following a negative year 75% of the time since 1970. Mid-cap stocks, such as toy maker Mattel [MAT], are expected to rise the most over the next 12 months, according to MarketWatch.
SpaceX named as a most-anticipated tech IPO
Elon Musk’s rocket manufacturer SpaceX is to raise $750m in a funding round that will value the company at a staggering $137bn. With the US IPO market virtually grounded in 2022 – there were just 71 traditional IPO listings versus 397 in 2021 – Renaissance Capital is expecting IPOs to take off in mid-2023 once market conditions normalise. Forbes has named SpaceX one of its most-anticipated tech IPOs of 2023.
Asian plays on China’s reopening
A miserable year for Asian equities wiped $5trn off their collective valuation, according to Bloomberg, but China’s decision to abandon its zero-Covid policy in December should boost investor sentiment in 2023. Morgan Stanley upgraded Chinese equities from equal weight to overweight last month and likes consumer discretionaries and durables in particular. Investors are hoping that the region’s chipmakers’ earnings will bottom in the first half of the year, Bloomberg reported.
Fixed income fared better than equities
Fixed income proved to be a shelter from stormy market conditions in 2022. The Janus Henderson Investors' Balanced Fund [JABAX] declined 16.4% last year, outperforming the S&P 500’s 19.4% drop by weighting its portfolio more in favour of fixed income. “The intention has always been to provide our investors with a smoother ride over time, with less volatility to returns by combining growth equities with fixed income,” portfolio manager Jeremiah Buckley told CNBC.
Demand for EV parts to accelerate
Janus Henderson [JHG] is bullish on the EV industry. In an interview with Barron’s, Brian Demain, who manages the Janus Henderson Enterprise fund [JDMAX], explained how the booming EV market will accelerate demand for auto parts. “When you pull out an internal combustion engine and put in a battery and all of the associated content, the amount of semiconductor content more than doubles,” said Demain. He named ON Semiconductor [ON] as a top pick.
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