S&P 500 likely 'flattish' in 2023, Meta Platforms the best mega-cap stock - JPM's survey

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By Senad Karaahmetovic

According to a survey conducted by JPMorgan, the S&P 500 is likely to deliver a “flattish” performance in 2023. The broker’s buy-side survey showed that 45% of investors see S&P 500 being +/-5% in 2023 while 18% see it down 5-15%.

On the recession chances, 45% of respondents said they see a 50-75% probability that the U.S. will enter a recession while 27% of respondents assigned a 25-50% chance.

The survey had a special focus on the U.S. internet sector, which is seen outperforming the S&P 500 in 2023.

“The top 3 Internet tailwinds are essentially tied--attractive valuation, easing comps, & improved margins/FCF profile. The top 2 headwinds by far are inflation/higher interest rates/macro and revenue deceleration/ growth concerns,” JPMorgan analysts wrote in a client note.

As far as individual stocks are concerned, Meta Platforms (NASDAQ:META) is seen as the best-performing mega-cap stock (41% of respondents), followed by Amazon (NASDAQ:AMZN) (36%), and Netflix (NASDAQ:NFLX) (14%).

On the other hand, 24% of respondents said Netflix will be the worst-performing mega-cap stock, followed by Alphabet (NASDAQ:GOOGL) (24%).

Other takeaways from the survey include:

• Investors surveyed expect Match Group (NASDAQ:MTCH) to lead Mid-Cap performance in 2023 (18%), while Farfetch (NYSE:FTCH) is expected to be the best-performing Small-Cap (24%);
• E-commerce will be the best-performing sub-sector;
• META is preferred in online ads (40%);
• Uber (NYSE:UBER) is preferred by far in rideshare/food delivery (70%);
• Booking (NASDAQ:BKNG) is preferred in online travel (39%);
• META, FTCH, and Spotify (NYSE:SPOT) are viewed as the best turnaround stories for 2023.