Business is booming.

The big market questions for 2022


The numbers verge on the incomprehensible. Since the pandemic began, central banks have injected $32tn in to markets around the world, equivalent to buying $800m of financial assets every hour of the past 20 months, according to Bank of America. Global equity market capitalisation has soared by $60tn.

But inflation has risen, and, eager to rein in prices, the US Federal Reserve last week announced its asset purchases will come to an end in March, with three interest rate rises likely next year.

Against this backdrop, these are the big questions banks and investors are asking for 2022.

Inflation: if not transitory, then what?

Central banks performed a U-turn on inflation in 2021, shifting from a reassurance that it would be a “transitory” reflection of the post-lockdowns bounceback to an acceptance that it is more persistent. In November, US consumer prices climbed at the fastest pace since 1982, eurozone prices rose by a record 4.9 per cent and UK figures jumped to a 10-year high.

Yet many banks and investors expect a retreat.

Morgan Stanley predicts that even though prices are likely to stay high next year, the rate at which they increase will peak in early 2022 as oil prices subside and supply chain issues ease.

Columbia Threadneedle likewise cites “improvements in the supply chain” as a significant reason why it thinks inflation will “ultimately fall” in 2022. This raises the alarming prospect that the Fed starts pushing up rates just as inflation backs down.

But BlackRock, the world’s largest asset manager, predicts higher inflation will persist “for years to come”.

Goldman Sachs expects core US consumer prices to remain above 4 per cent deep in to next year. Central banks’ willingness to tolerate higher inflation will keep inflation-adjusted bond yields relatively low, which should also provide support for equity markets, it says.

It expects positive returns from global equity markets and negative returns from government bonds for a second year in a row, the first time this combination has happened for half a century.

Central banks have started turning off the taps, or at least signalling that they will next year. Investors are nervous that they will end up clamping down too hard.

David Folkerts-Landau, chief economist at Deutsche Bank, says if inflation fails to moderate, central banks will shift into a “more aggressive monetary tightening stance, causing a sharply negative reaction in financial markets and most likely a significant economic recession”.

UBS says a central bank policy error is one of the “key risks for investors and the global economy in 2022”. Bank of America adds that markets “are moving from a period in which central banks have tried to be predictable and suppress volatility to one in which they will increasingly be the source of surprises”.

Will US equities keep rising?

“Clients say to us that market momentum has peaked, earnings have peaked, liquidity has peaked, central banks will be tightening, you should be taking some profits,” said Mislav Matejka, head of global and European equity strategy at JPMorgan. “We don’t agree with that.”

Goldman Sachs expects the S&P 500 to climb a further 9 per cent by the end of 2022.

Some worry however that gains in equities, particularly in frothier corners of the market, are not sustainable.

Morgan Stanley says its base-case scenario is for the S&P to drop 5 per cent. Bank of America meanwhile predicts that economic deceleration and higher interest rates will drag the main US equity gauge down 3 per cent.

What is the outlook for Europe?

The European Central Bank faces a “difficult and volatile” environment for prices heading into next year, says Frederik Ducrozet, senior strategist at Pictet Wealth Management.

“The broad outlook is one of not just permanently high inflation but also of permanently high inflation volatility,” he said.

The ECB last week committed to scaling back its pandemic-era bond-buying programme in response to higher prices, while reiterating that rate rises will have to wait until 2023.

The consensus expectation, according to data compiled by Bloomberg, is for the Stoxx 600 index to rise 6 per cent as economic growth continues and yields on bonds remain low. Yet Bank of America expects those trends to reverse in 2022, with the Stoxx falling 10 per cent.

Ben Ritchie, head of European equities at Abrdn, the Edinburgh-based asset manager, says investors should focus on businesses with strong competitive positions, pricing power and access to structural growth drivers.

Although valuation multiples for European equities are a challenge, Ritchie says the healthcare, consumer goods and financial sectors offer “plenty of opportunities”. 

Pimco, however, predicts that European equities will be “more challenged” owing to a combination of unfavourable sector composition, energy price headwinds, and growing unease around the Covid-19 outlook.

Jordan Rochester, a foreign exchange strategist at Nomura, says upward pressures on energy, food and services prices will mean the headline European inflation rate will remain uncomfortably high next year.

He notes that the price of gas in Europe has risen about 573 per cent this year, reflecting concerns that Germany could run low on supplies over winter. Increases in the cost of gas are driving up fertiliser prices, which are highly correlated with the price of food. Consumers are likely to react to these developments with demands for higher wages, Rochester says.

Watch out for French presidential elections in April.

What next for China and emerging markets?

“Emerging markets had a really horrible year and there are going to be a lot more ugly headlines . . . in part because [China’s] zero-Covid policy is going to be tough to maintain, especially with Omicron,” said Chris Jeffery, multi asset manager and head of rates and inflation at LGIM.

China’s CSI 300 stocks index has fallen 3 per cent this year after policymakers in Beijing imposed new restrictions on technology, education and property companies.

Meanwhile, Claudia Calich, head of emerging markets debt at M&G Investments, says the problems in China’s property sector serve as a reminder of the dangers and fragility that can lurk in Asian corporate bond markets, until recently a growing area of interest for international investors.

Calich added that investors should brace for “significant downside risks” in emerging markets if the severity of the virus proves to be worse than anticipated, particularly among the many nations that still have largely unvaccinated populations.

Source link

  1. Bdfvkp says

    buy levofloxacin 500mg levaquin 250mg ca

  2. Ucdvwf says

    buy avodart pills order celebrex 200mg online ondansetron pill

  3. Prhmby says

    aldactone 100mg oral order spironolactone for sale diflucan tablet

  4. Airqik says

    buy acillin online acillin without prescription cheap erythromycin

  5. Sylaln says

    sildenafil for sale online order robaxin 500mg buy methocarbamol pill

  6. Rxsbnu says

    order sildenafil 100mg generic order sildenafil 50mg generic buy estradiol 2mg pills

  7. Zswzjn says

    lamotrigine order online lamictal ca buy retin online cheap

  8. Zlqguk says

    buy tadalis voltaren 100mg ca buy diclofenac 100mg pills

  9. Nwoevl says

    purchase isotretinoin pills cheap amoxil tablets order zithromax generic

  10. Xgbmlw says

    cialis without prescription buy cheap cialis order sildenafil 100mg online

  11. Gsbxvb says

    pharmacie en ligne tadalafil pharmacie en ligne sildenafil 50mg acheter 25mg viagra en ligne

  12. Jrcwom says

    order deltasone 40mg for sale generic cialis medicine cost of viagra 100mg

  13. Dwfwyu says

    tadalafil 20mg kaufen sildenafil 200mg für männer sildenafil 100mg generika

  14. Euzmjv says

    accutane 20mg for sale accutane 20mg tablet buy ivermectin uk

  15. Fchwaz says

    doxycycline 100mg generic buy generic doxycycline 100mg cheap lasix

  16. Pbmxif says

    brand altace order irbesartan 150mg pills generic azelastine

  17. Tmrdlw says

    order generic clonidine antivert 25mg over the counter tiotropium bromide 9mcg sale

  18. Lmzzal says

    buspirone 10mg without prescription generic dilantin 100mg buy ditropan generic

  19. Gaaxsp says

    terazosin price buy actos generic purchase sulfasalazine online cheap

  20. Kdezru says

    cost fosamax 35mg paracetamol usa buy pepcid generic

  21. Zqlkhc says

    order olmesartan 20mg generic verapamil 120mg for sale order diamox pills

  22. Zyrajo says

    imdur sale order imdur 20mg online cheap buy generic telmisartan 80mg

  23. Pvnoga says

    purchase zyban generic strattera 10mg for sale quetiapine 50mg sale

  24. Unmwxb says

    order molnupiravir 200mg online cheap molnupiravir 200mg us buy lansoprazole 15mg without prescription

  25. Aufqpp says

    buy sertraline for sale sertraline 50mg ca order viagra 100mg generic

  26. Emmjlr says

    order salbutamol 100mcg generic salbutamol 100 mcg over the counter order sildenafil 100mg online

  27. Mpogko says

    buy tadalafil for sale buy generic tadalafil 20mg buy viagra 100mg sale

  28. Nazwhy says

    buy generic tadalafil 40mg purchase phenazopyridine generic buy amantadine 100mg pills

  29. Dndeft says

    revia online generic letrozole 2.5mg order abilify pills

  30. Zryjub says

    provera usa praziquantel order online order generic cyproheptadine 4mg

  31. Igniud says

    brand provigil best rated canadian online pharmacy stromectol ivermectin buy

  32. Lhjaqs says

    cost fluvoxamine 100mg cymbalta 20mg us order glucotrol 5mg online cheap

  33. Wojlud says

    isotretinoin 10mg us order amoxicillin 500mg for sale buy generic deltasone 10mg

  34. Pnnxta says

    purchase piracetam generic sildenafil overnight shipping sildenafil 50mg tablets

  35. Enryzj says

    cheap azithromycin buy gabapentin 800mg generic gabapentin 600mg for sale

  36. Xpdrcd says

    tadalafil without a doctor’s prescription genuine viagra generic sildenafil 50mg

  37. Lsvacs says

    buy furosemide 100mg for sale hydroxychloroquine 200mg sale order plaquenil for sale

  38. Jukvvp says

    tadalafil 20mg without prescription generic clomipramine anafranil brand

  39. Ftjjbk says

    aralen cost chloroquine tablet buy olumiant for sale

  40. Acgren says

    itraconazole 100 mg cost buy prometrium 100mg generic buy tinidazole 300mg pill

  41. Aqezcv says

    order generic metformin 500mg brand lipitor 20mg cialis daily

  42. Glfdsy says

    cheap zyprexa 10mg order nebivolol 5mg generic order valsartan 160mg generic

  43. Pefrds says

    purchase amlodipine sale cialis 10mg canada tadalafil 10mg pills

  44. Bvraku says

    sildenafil next day delivery viagra usa lisinopril canada

  45. Hnecxq says

    purchase prilosec sale real money slots free spins no deposit play poker online free casino world

  46. Jgxozk says

    buy zyvox pills roulette online with real money free slot play

  47. Jvllwx says

    purchase lopressor online cheap levitra pill cheap vardenafil 10mg

  48. Drzzsx says

    paper help free poker online games vegas casino online

  49. Sbxose says

    purchase levitra pill buy generic pregabalin 150mg buy methylprednisolone 16mg

  50. Pymzbn says

    my future essay writing thesis website buy sildenafil 50mg online cheap

  51. Mfowfh says

    order clomiphene without prescription order clomid 100mg for sale blackjack online betting

  52. Awnfjh says

    tadalafil women buy tadalafil without prescription purchase sildenafil online

  53. Nihxpp says

    triamcinolone 10mg sale cost desloratadine desloratadine 5mg usa

  54. Sylnjy says

    tadalafil 10mg pills viagra 50mg over the counter order sildenafil 100mg generic

  55. Plrmkp says

    generic orlistat generic xenical 120mg buy acyclovir 400mg generic

  56. Tjnxey says

    cialis 20mg oral propranolol pill order clopidogrel generic

  57. Kfxyvi says

    zyloprim buy online crestor without prescription zetia ca

  58. Pmljoo says

    methotrexate uk order methotrexate 2.5mg without prescription order metoclopramide 10mg pills

  59. Wuggju says

    losartan 50mg pills buy topamax 100mg pill topamax 100mg canada

  60. Dxyvne says

    brand baclofen 25mg order tizanidine 2mg for sale buy toradol 10mg generic

  61. Drmfxw says

    sumatriptan 50mg tablet buy imitrex 50mg order dutasteride pills

  62. Lcyfxc says

    colchicine usa roulette games jackpot party casino

  63. Zlsjzd says

    best online casino online poker free casino slots

  64. Ootmzx says

    buy tamsulosin 0.2mg zofran price buy aldactone 25mg

  65. Dcbehh says

    order tadalafil 10mg sale buy ciprofloxacin 1000mg pill order cipro 1000mg for sale

  66. Kzyihe says

    simvastatin 10mg pills buy propecia 1mg online cheap cost proscar 1mg

  67. Vrjsme says

    buy flagyl 400mg online cheap augmentin 1000mg for sale cheap bactrim 960mg

  68. Zmftbx says

    keflex 250mg usa keflex 500mg tablet order generic erythromycin 250mg

  69. Gghyaq says

    tadalafil 10mg brand cialis pills 10mg buy sildenafil online cheap

  70. Sqssud says

    sildenafil 50mg tablets cialis next day delivery purchase cialis online cheap

  71. Pobbrm says

    order ceftin 500mg pills buy bimatoprost pill order robaxin 500mg online

  72. Woakqa says

    jackpot party casino cialis 20mg generic cialis over the counter

  73. Xrmkwm says

    desyrel 50mg without prescription aurogra online buy aurogra online

  74. Uwehqm says

    affordable dissertation writing academic writing support buy ivermectin cream for humans

  75. Xemove says

    sildenafil 200mg for sale generic lamictal buy lamictal 200mg online

  76. Lvkcwe says

    viagra australia tadalafil 5mg over the counter cialis overnight delivery

  77. Jdnmtj says

    poker games tadalafil 5mg uk cialis 20mg pills

  78. Yhpqhx says

    zithromax cheap gabapentin sale order neurontin 800mg online

  79. Ziyeoe says

    best poker online real money stromectol 12mg brand modafinil 200mg brand

  80. Tlpzsx says

    oral lasix 100mg plaquenil usa hydroxychloroquine online order

  81. Elffuq says

    deltasone 10mg for sale vermox cheap buy vermox sale

  82. Oqofqp says

    buy sildenafil without prescription cost fildena order budesonide pill

  83. Yqslka says

    retin cream tablet buy avana 200mg pills avana order

  84. Dqoxha says

    purchase tadacip sale tadacip 20mg generic indomethacin medication

  85. Zmwvzd says

    buy naproxen 250mg online purchase naproxen online cheap order prevacid pills

  86. Hgdjkj says

    brand proventil 100mcg albuterol online buy cipro generic

  87. Aifxaj says

    singulair 5mg oral sildenafil 50mg pill cheap sildenafil without prescription

  88. Txeogp says

    cialis 10mg pills tadalafil drug cialis super active

  89. Fmfljv says

    ivermectin syrup order dapsone 100 mg pills avlosulfon 100mg canada

  90. Cbnhqx says

    order adalat 30mg for sale buy generic allegra 180mg order fexofenadine 120mg sale

  91. 총판사이트 says

    yow wassup! i got 총판사이트 100$ in this website, ill send this link if you dm me or visit my profile if you are interested! 😉 😉 ,

  92. Rjwudo says

    doxycycline 200mg ca order cleocin for sale clindamycin cost

  93. Aacpll says

    research paper assistance azulfidine uk azulfidine over the counter

  94. Shpvax says

    order clobetasol sale buspar 10mg sale order amiodarone 200mg without prescription

  95. Ouyppy says

    cheap diamox imdur pill purchase imuran

  96. Tfwtli says

    buy lanoxin 250 mg molnunat 200mg cheap buy molnupiravir 200 mg pills

  97. Cargtl says

    fosamax sale furadantin 100 mg cost order motrin 400mg online cheap

  98. Ghxvcr says

    generic nortriptyline buy paroxetine generic buy generic paroxetine

  99. Khficw says

    pepcid 20mg cheap pepcid online order buy remeron 15mg generic

  100. Ubwtxv says

    buy requip without prescription order generic ropinirole 2mg order trandate 100 mg without prescription

  101. Jaemro says

    fenofibrate 200mg uk viagra fast shipping sildenafil uk

  102. Hhedza says

    order generic tadalafil viagra tablets brand sildenafil 50mg

  103. Zjyruy says

    cialis coupon walmart cialis online medications for ed

  104. Simqhb says

    order generic prednisone 20mg deltasone 10mg for sale order amoxil 250mg sale

  105. Ozzeho says

    brand sildenafil 50mg lyrica sale purchase proscar without prescription

  106. Ujevbq says

    ondansetron 4mg drug zofran 8mg tablet sulfamethoxazole tablet

  107. Uhnauk says

    ventolin inhalator us ventolin 4mg generic oral augmentin 375mg

  108. Cfmblc says

    modafinil without prescription metoprolol 100mg cost purchase metoprolol online

  109. Gegieo says

    avodart 0.5mg tablet order generic xenical 120mg generic xenical

  110. Jjbuqg says

    purchase azathioprine online cheap micardis ca naprosyn 250mg sale

  111. Mmwdcb says

    cefdinir 300mg canada purchase protonix pill protonix 20mg canada

  112. Lvwwrn says

    buy dapsone 100 mg online order avlosulfon 100mg without prescription oral atenolol 50mg

Leave A Reply

Your email address will not be published.