The View | Five indicators to watch in 2023 that may impact your investment choices

“The virtuous circle will turn vicious” was the prediction made by this column at the end of 2021. We can’t claim to be a soothsayer for it seemed evident that 2022 would show that what goes up will come down.

Since 1871 there has been no year in which both global bonds and equities have fallen quite so much. We’ve seen those markets lose US$30 trillion in value in just one year – that’s the equivalent of the annual output of nearly two US economies.

The S&P 500 fell a fifth, as did Chinese stocks. Nasdaq lost a third, while Meta (Facebook), Tesla and Bitcoin dropped by two thirds. Elon Musk’s venture into Twitter already looks like his Waterloo. Global bonds were down 16 per cent after never having fallen into double figures. The sectors that did well, like the 8 per cent surge in the US dollar index, merely highlight the general distress.

The UK’s FTSE 100 index was one of the few in positive territory after Vladimir Putin’s war supported the market’s energy, mining, and pharmaceutical stocks – not to mention the nearly 12 per cent fall in the pound.

And yet, by year-end many analysts were talking the markets up, saying they had recovered in the fourth quarter of 2022, and that the Fed slowing interest rate rises and high inflation meant employment. It may be that 2023 won’t repeat the absolute falls of last year, but we may see something worse than blood on Wall Street: a crisis in Main Street.