Oil plunge, tech collapse and Fed cuts? Strategist shares possible 2023 market ‘surprises’
A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, August 29, 2022.
Brendan McDermid | Reuters
After a tumultuous year for financial markets, Standard Chartered outlined a number of potential surprises for 2023 that it says are being “underpriced” by the market.
Eric Robertson, the bank’s head of research and chief strategist, said outsized market moves are likely to continue next year, even if risks decline and sentiment improves. He warned investors to prepare for “another year of shaken nerves and rattled brains.”
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The biggest surprise of all, according to Robertson, would be a return to “more benign economic and financial-market conditions,” with consensus pointing to a global recession and further turbulence across asset classes next year.
As such, he named eight potential market surprises that have a “non-zero probability” of occurring in 2023, which fall “materially outside of the market consensus” or the bank’s own baseline views, but are “underpriced by the markets.”
Collapsing oil prices
Oil prices surged over the first half of 2022 as a result of persistent supply blockages and Russia’s invasion of Ukraine, and have remained volatile throughout the remainder of the year. They declined 35% between June 14 and Nov. 28, with output cuts from OPEC+ and hopes for an economic resurgence in China preventing the slide from accelerating further.
However, Robertson suggested that a deeper-than-expected global recession, including a delayed Chinese recovery on the back of an unexpected surge in Covid-19 cases, could lead to a “significant collapse in oil demand” across even previously resilient economies in 2023.
Should a resolution of the Russia-Ukraine conflict occur, this would remove the “war-related risk premia” — the additional rate of return investors can expect for taking more risk — from oil, causing prices to lose around 50% of their value in the first half of 2023, according to Robertson’s list of “potential surprises.”
“With oil prices falling quickly, Russia is unable to fund its military activities beyond Q1-2023 and agrees to a ceasefire. Although peace negotiations are protracted, the end of the war causes the risk premium that had supported energy prices to disappear completely,” Robertson speculated.
“Risk related to military conflict had helped to keep front contract prices elevated relative to deferred contracts, but the decline in risk premia and the end of the war see the oil curve invert in Q1-2023.”
In this potential scenario, the collapse in oil prices would take international benchmark Brent crude from its current level of around $79 per barrel to just $40 per barrel, its lowest point since the peak of the pandemic.
Fed cuts by 200 basis points
The main central bank story of 2022 was the U.S. Federal Reserve’s underestimation of rising prices, and Chairman Jerome Powell’s mea culpa that inflation was not, in fact, “transitory.”
The Fed has subsequently hiked its short-term borrowing rate from a target range of 0.25%-0.5% at the start of the year to 3.75%-4% in November, with a further increase expected at its December meeting. The market is pricing an eventual peak of around 5%.
Robertson said a potential risk for next year is that the Federal Open Market Committee now underestimates the economic damage inflicted by 2023’s massive interest rate hikes.
Should the U.S. economy fall into a deep recession in the first half of the year, the central bank may be forced to cut rates by up to 200 basis points, according to Robertson’s list of “potential surprises.”
“The narrative in 2023 quickly shifts as the cracks in the foundation spread from the most highly leveraged sectors of the economy to even the most stable,” he added.
“The message from the FOMC also shifts rapidly from the need to keep monetary conditions restrictive for an extended period to the need to provide liquidity to avoid a major hard landing.”
Tech stocks fall even further
Growth-oriented technology stocks took a hammering over the course of 2022 as the steep rise in interest rates increased the cost of capital.
But Standard Chartered says the sector could have even further to fall in 2023.
The Nasdaq 100 closed Monday down more than 29% since the start of the year, though a 15% rally between Oct. 13 and Dec. 1 on the back of softening inflation prints helped cushion the annual losses.
On his list of potential surprises for 2023, Robertson said the index could slide another 50% to 6,000.
“The technology sector broadly continues to suffer in 2023, weighed down by plunging demand for hardware, software and semiconductors,” he speculated.
“Further, rising financing costs and shrinking liquidity lead to a collapse in funding for private companies, prompting further significant valuation cuts across the sector, as well as a wave of job losses.”
Next-generation tech companies could then see a surge in bankruptcies in 2023, shrinking the market cap share of these companies on the S&P 500 from 29.5% at its peak to 20% by the end of the year, according to Robertson.
“The dominance of the tech sector in the S&P 500 drags the broader equity index lower too,” he suggested, adding: “The tech sector leads a global equity collapse.”
Environment
Podcast: Xiaomi shocks with YU7, Tesla Robotaxi launch, Rivian brings back tank mode, and more
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss Xiaomi shocking the industry with YU7, Tesla’s Robotaxi launch, Rivian bringing back tank mode, and more.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
Today, the episode is live at 12:15 a.m instead due to Fred’s travels in China and Seth’s in.
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Solar provided over 10% of total US electrical generation in April, wind and solar produced almost one-quarter, and the mix of all renewable energy generated nearly a third, according to data just released by the US Energy Information Administration (EIA).
Solar set new records in April and the first third of 2025
EIA’s latest monthly “Electric Power Monthly” report (with data through April 30, 2025), which was reviewed by the SUN DAY Campaign, confirms that solar continues to be the fastest-growing source of US electricity.
In April alone, electrical generation by utility-scale solar (>1 MW) increased by 39.3% while “estimated” small-scale (e.g., rooftop) solar PV increased by 11.8%. Combined, they grew by 31.3% and provided 10.7% of US electrical output.
Utility-scale solar thermal and PV expanded by 42.4% while that from small-scale systems rose by 11.4% during the first third of 2025 compared to the same period in 2024. The combination of utility-scale and small-scale solar increased by 32.9% and was almost 7.7% of total US electrical generation for January-April, up from 6.1% a year earlier.
As a result, solar-generated electricity easily surpassed hydropower output, at 6.0%. In fact, solar is now producing more electricity than hydropower, biomass, and geothermal combined.
Wind is still the renewable energy leader
Wind turbines produced 12.6% of US electricity in the first four months of 2025. Their output was 5.9% greater than the year before.
In April alone, wind provided 13.9% of US electricity supply, essentially equal to the share provided by coal.
Wind and solar now outproduce coal and nuclear
During the first third of 2025, electrical generation by wind plus utility-scale and small-scale solar provided 20.3% of the US total, up from 18.5% during the first four months of 2024. In just the month of April, solar plus wind accounted for 24.6% of US electrical output.
During the first four months of this year, the combination of wind and solar provided 20.2% more electricity than did coal, and 13.8% more than US nuclear power plants. In April alone, the disparity increased significantly when solar + wind outproduced coal and nuclear power by 77.1% and 40.2%, respectively.
Renewables are closing in on natural gas
The mix of all renewables (wind and solar plus hydropower, biomass, and geothermal) produced 10.3% more electricity in January-April than they did a year ago (9.7% more in April alone) and provided 27.7% of total US electricity production compared to 26.3% 12 months earlier.
Electrical generation by the combination of all renewables in April alone reached a new record and provided 32.8% of total US electrical generation. Moreover, renewables are now approaching the share provided by natural gas (35.1%), whose electrical output actually dropped by 4.4% during the month.
For perspective, five years ago, in April 2020, the mix of renewables provided 24.4% of total electrical generation while natural gas accounted for 38.8%.
Consequently, the mix of renewables has further strengthened its position as the second largest source of electrical generation, behind only natural gas, with the gap closing rapidly.
Ken Bossong, the SUN DAY Campaign’s executive director, noted:
Solar is now the fastest-growing major source of electricity and is generating more than hydropower, biomass, and geothermal combined, while wind plus solar provides more electricity than either coal or nuclear power, and the mix of all renewables is nearly matching the output of natural gas.
Yet, the Trump administration and the Republican Congress are seeking to pull the rug out from underneath renewables in favor of dirtier and more expensive fossil fuel and nuclear technologies. What are they thinking?
Read more: $15.5B in EV, renewable projects vanish as Senate eyes rollbacks
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![Here's a look at the Kia EV4 GT before you're supposed to see it [Video]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2025/06/Kia-EV4-GT-US.jpeg?resize=1200,628&quality=82&strip=all&ssl=1)
Kia’s upcoming EV4 GT is gunning for the Tesla Model 3 Performance, but it’s expected to undercut the price. Could this be the affordable electric sports car we’ve been waiting for? A new video shows the Kia EV4 GT driving on US streets ahead of its debut.
Kia EV4 GT is testing in the US ahead of its debut
After launching it in Korea in April, some are already calling Kia’s first electric sedan “a box office hit.” The EV4 was the best-selling domestic electric sedan in Korea in May, its second month on the market.
Kia’s electric sedan starts at just 41.92 million won, or around $30,000 in Korea. When it arrives in the US and Europe, the entry-level EV is expected to start at about $35,000 to $40,000 (€35,000).
With its sleek, fastback silhouette, the EV4 already looks like a sports car, making it an ideal candidate for a high-performance upgrade. All the EV4 needs is a little added power. Don’t worry, Kia plans to turn up the heat very soon.
We caught our first glimpse of the interior earlier this month after a prototype was spotted outside of a Kia facility in Korea.
A new video is giving us a closer look at the Kia EV4 GT being tested in the US for the first time. The video from the folks at KindelAuto reveals a few design elements you can expect to see, like Kia’s vertical LED headlights with its signature Star Map lighting.
Although it’s still covered, you can expect to see Kia’s new Tiger Face grille design, which aligns with its latest electric models, including the EV9 and EV3.
We will have to wait until closer to launch for final prices and specs, but like Kia’s other GT vehicles, the EV4 GT is expected to feature an AWD dual-motor powertrain.
It will sit under the EV6 GT, which boasts 576 hp, enabling a 0 to 60 mph sprint time of 3.4 seconds. Will the smaller EV4 GT top it? With recent advancements in battery and powertrain technology, it wouldn’t be a surprise.
Kia will launch the EV4 in the US later this year with an EPA-estimated driving range of up to 330 miles. Additionally, it will feature a built-in NACS port, allowing it to recharge at Tesla Superchargers. With the base model expected to start at around $35,000, the high-performance GT variant could cost around $50,000 to $55,000.
In comparison, the Tesla Model 3 Performance starts at $54,990 with an EPA-est range of 298 miles. It can also accelerate from 0 to 60 mph in just 2.9 seconds.
Would you pick the Kia EV4 GT for around $50,000, or are you sticking with the Tesla Model 3 Performance? Got a better option in mind? Drop us a comment below.
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