News
2023 Market Predictions

By Michael O’Connor, theislandinvestor.com
For me, investing is just a potent mix of optimism and paranoia - being optimistic about what the future holds but constantly paranoid about the landmines that you will undoubtedly trigger along the way.
Finding a balance between the two is key, but I have to admit, going into 2023, paranoia appears to have the upper hand.
Expectation vs Reality
Whether you are waiting on test results, or tentatively hovering over the phone for that all important call back from your potential new employer, it's the difference between expectation and reality that dictates the severity of your reaction.
Regardless of how bad the reality turns out to be, if your initial expectations were set apocalyptically low, your reaction will probably be positive and vice versa.
Financial markets work the same way. As I have said before, investing is never about things being objectively good or bad. The narrative is always based around better or worse. If the outlook for markets is exceptionally high and the performance falls even slightly below these expectations, prices will fall as a result. The fact that performance and growth is still strong in absolute terms is irrelevant if expectation were not met. With this in mind, in order to understand how markets will react in 2023, we must first analyse the market's expectations.
The Year Ahead
On the equity side, 12-month forward earnings projections for the S&P 500 are set at 5%. In other words, analysts predict American companies will grow their profits by 5% next year.
While this represents a significant slowdown in growth relative to what we have experienced since the pandemic pullback in early 2020, I view this as optimistic, given the considerable change in monetary and fiscal policy in 2022.
Q3 2022 earnings season looks likely to finish at 2% year-over-year growth, the weakest since the height of the pandemic. Ex-energy, performance becomes weaker still.
Looking ahead to Q4 2022, analysts are now predicting the first negative quarter since 2020, with profit growth falling to -2%. These Q4 earnings predications from the same analysts were as high as +9% as recently as June.
While expectations for ‘23 are still at plus 5% earnings growth, I wouldn’t be surprised to see 2023 earnings forecasts suffer the same faith as the Q4 2022 forecast.
In short, markets are a bit like the Irish weather, never believe the forecast.
As leading indicators continue to point towards a slowdown in economic activity, a base case of positive 2023 earnings growth becomes difficult to justify. In my view, this will result in some negative earnings surprises in the second half of 2023.
In Fixed Income markets, the Fed has reiterated its plan to hold rates higher for longer, and this expectation is reflected in markets. According to the market-implied Fed Funds Rate, investors are now expecting US short term interest rates to peak at 4.9% in six months and remain well above 4% into 2024.
In my view, the probability of the Fed maintaining a long pause as we enter more economically uncertain times is not as high as the market is predicting. I believe a pivot is likely before 2024 as earnings and labour markets weaken.
Summary
While the lows for multiples may already be in, a mild earnings recession in the second half of 2023 may result in a slow grind lower for the stock market.
This pullback in earnings and labour will prompt a pivot from the Fed, forcing them to cut rates in an attempt to avoid the re-emergence of the disinflationary forces that provoked a decade of QE through the 2010s.
While it is impossible to know the exogenous shocks that lie ahead, buying up short-term Treasuries and maintaining a tilt toward value-based equity will protect if the current economic slowdown persists.
For more tips on how to beat the market in 2023, simply go to www.theislandinvestor.com.
News
Fossa School says ‘bonjour’ to French classes

Fossa National School is giving its pupils a headstart in learning a new language.
The school signed up to Language Sampler scheme as part of the ‘Say Yes to Languages’ initiative in primary schools organised by Post Primary languages Ireland in 2021. This is the school’s third year running the module.
Hélène Olivier-Courtney, the school’s French teacher and director of French For All Killarney School of French, covers ten schools in Kerry over the three terms.
The success of the initiative relies on an all-school approach and the active involvement of class teachers and management.
“The whole staff in Fossa certainly helped make this new journey a special and enjoyable experience for the children as we learnt French through art, songs, games and food tasting! This year, we also organised a catwalk on our last day. Our sixth-class students will have such a head start before secondary school and most importantly will have develop curiosity interest and love for the language,” said Hélène.
News
Opinion: Silent majority needs to stand up and call out far-right hate

By Chris Davies
Last Friday’s Dublin Riots should not have come as a surprise to anyone. It has been bubbling under the surface of Irish society for a good number of years now. The actions of a small minority last week was a culmination of years of racism, hatred and misinformation shared online by far-right groups.
Late on Friday night a disturbing WhatsApp voice note was doing the rounds on social media where a far-right actor could clearly be heard encouraging violence on the streets of Dublin.
“’Seven o’clock, be in town. Everyone bally up, tool up…Any foreigner, just kill them”
Watching the Riots unfold on social media brought me back to when I was working in Dublin a number of years back. My morning commute from Skerries to the city centre involved a dart to Connolly Station followed by a short trip on the Luas to the Jervis. Every week, without fail, I would witness at least one racial slur or attack on someone who didn’t fit the narrow minded view of what an Irish person should look, dress or talk like. I don’t know if it is the eerie silence of public transport that seems to amplify the situation, but that’s where I found it to be most common. The abuse was usually perpetrated by a group of youths or someone who was clearly under the influence of drink or drugs. The victims were always of colour, often dressed smartly enough to presume they were on their way, or coming from work. A far cry from the perpetrators who you could tell were roaming aimlessly around the city looking for trouble.
While shameful to admit, I would often look on and watch the abuse unfold, only to spend the rest of my work day thinking about the poor person who was told to “F*&K off back to your own country”. I would sit at my desk questioning why I didn’t step in and say something. There were one or two occasions where I did step in and call it out, but not nearly often enough.
This disgusting behaviour is much more visible in our cities. Since moving back to Killarney I wouldn’t witness as much direct abuse on the streets but working with the Killarney Advertiser I would be tuned in to local news and some of the comments I read on our social platforms are far worse than anything I witnessed during my time in Dublin.
There is a significant group of people in Ireland that I would call the ‘silent majority’. We are not as outspoken on issues we care about. We tend to observe and consume the news quietly, and only speak of our support or disgust on certain issues in close circles, too afraid we might offend someone. The problem with this is that we are leaving these far-right groups unchallenged, to become louder, more aggressive and more hostile as seen last week.
The past week Sinn Fein and the Social Democrats have been busy in the media expressing no confidence in Justice Minister Helen McEntee and Garda Commissioner Drew Harris but I would suggest that there is a large percentage of the Irish population that bears some of the responsibility. We witness racism in our communities and online every day and we need to start speaking up and calling it out.
On the issue of immigration in Killarney, there is no doubt resources are being stretched and our tourism industry is suffering as a result of an influx of immigration. Locals have also raised concerns in relation to the placement of so many male international protection applicants in one setting and we only have to look back on the incident in Hotel Killarney last year where a number of men were involved in a harrowing stabbing incident to see how that played out.
However, being concerned around immigration is not the same as anti-immigration. It is important to raise these issues with local representatives and Kerry TD’s but also to separate ourselves from far-right groups who are only interested in encouraging violence.
The anarchy we witnessed last week should never be the answer and research shows it is completely unnecessary. Harvard University have looked at hundreds of protests over the last century, and found that non-violent campaigns are twice as likely to achieve their goals as violent campaigns and that it only takes around 3.5% of the population actively participating in the protests to ensure serious political change.
Let’s continue to protest peacefully for issues we believe in, but stand up and speak out against people and movements in our community that incite hate and violence.