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Numbers end up in ambiguity. Since the outbreak, central banks have entered $ 32tn into markets around the world, equivalent to buying $ 800m in fines every hour for the past 20 months, according to the Bank of America. Global market growth has risen by $ 60tn.
But inflation has risen sharply, and, in an effort to raise prices, the US Federal Reserve last week announced its decision. shopping stops in March, and interest rates will increase three times next year.
Based on this, these are the big questions that banks and fundraisers are asking 2022.
Lower prices: if not passing, then what?
Central banks also reversed a rise in inflation in 2021, moving from a guarantee that it would be a “temporary” sign of a post-Lockdowns return to acknowledging that I am persistent. In November, U.S. consumer prices rose the fastest movement since 1982, eurozone prices rose by 4.9 percent and UK rates rose to 10 years.
Yet most banks and depositors expect a return.
Morgan Stanley predicts that while prices are expected to rise next year, the increase will rise in early 2022 as oil prices fall sharply and social pressures deteriorate.
Columbia Threadneedle also cites “sales volatility” as the main reason why inflation is expected to “fall” in 2022. This raises the alarming hope that The Fed begins to rise in price as inflation returns to the ground.
But BlackRock, the world’s largest economist, predicts that inflation will continue “for years to come”.
Goldman Sachs expects high consumer prices in the US to remain above 4 percent within the next year. The willingness of central banks to accommodate rising inflation results in lower yields of inflation, which should also help the markets, ”he said.
It expects positive returns from global markets as well as negative returns from state governments for the next second year, the first time this consolidation has taken place for half a century.
Central banks have begun shutting down tapes, or suggesting they do so next year. Investors fear that in the long run, it will only get worse.
David Folkerts-Landau, chief financial officer at Deutsche Bank, says that if inflation does not improve, central banks will turn into “strong economic systems, making the financial markets more difficult”.
UBS says the failure of the central bank’s policy is one of the biggest threats to investors and the global economy in 2022. Bank of America adds that markets “are moving away from the moment when central banks try to be transparent and prevent instability that will be dramatic”.
Should US equities continue to rise?
“Customers tell us that the market is high, profits are high, prices are high, central banks are growing, you need to make a profit,” said Mislav Matejka, JPMorgan, head of global and European business processes. “We do not agree with that.”
Goldman Sachs expects the S&P 500 to increase 9 percent by the end of 2022.
Some worry that business profits, especially in the commercial sector, are not sustainable.
Morgan Stanley says his predicament is that the S&P will drop by 5 percent. Bank of America currently predicts that inflation and rising interest rates will push the US equity gauge down by 3 percent.
What is the attitude of Europeans?
The European Central Bank is facing a “difficult and volatile” environment for prices coming up next year, says Frederik Ducrozet, a senior analyst at Pictet Wealth Management.
“Greater visibility not only increases inflation but also stronger dynamics of inflation,” he said.
The ECB last week pledged to reduce its bond-buying program during the epidemic in light of rising prices, adding that inflation should wait until 2023.
A coherent expectation, according to data produced by Bloomberg, is that the Stoxx 600 rate will increase by 6 percent as economic growth continues and yields on bonds remain low. However Bank of America expects this to change in 2022, Stoxx is down 10 percent.
Ben Ritchie, head of European equities in Abrdn, Edinburgh’s finance manager, says investors should focus on businesses that have competitive advantage, pricing power and access to growing drivers.
While multiplying European equities is difficult, Ritchie says health care, consumer goods and financial sectors offer “many opportunities”.
Pimco, however, predicts that European corporations have “become increasingly difficult” due to the combination of poor segments, rising electricity prices, and the growing instability around Covid-19.
Jordan Rochester, a business expert in Nomura, says rising electricity, food and employment prices will mean that inflation rates in Europe will continue to rise sharply next year.
He also said that the price of gas in Europe has risen by about 573 percent this year, indicating concern that Germany could fall in winter prices. Rising gas prices are raising fertilizer prices, which are closely linked to the cost of food. Consumers need to take action on these developments and demand for higher wages, Rochester says.
Beware of the French Presidential election in April.
What’s next for China and the coming markets?
“The forthcoming markets had a very bad year and there have been very bad headlines. . . among other reasons [China’s] zero-Covid principles will be difficult to maintain, especially with Omicron, “said Chris Jeffery, chief logistics and senior pricing and pricing director at LGIM.
China’s CSI 300 index is down 3 percent this year after policymakers in Beijing imposed new sanctions on technology, education and goods.
Meanwhile, Claudia Calich, head of the emerging market credit for M&G Investments, says the crisis in China’s financial sector serves as a reminder of the risks and weaknesses that can be hidden in Asian corporate markets, until soon to attract investors’ interest. all around the world.
Calich added that investors should fight the “dangerous risks” in the coming markets if the risk of the virus is greater than expected, especially in many countries where there are still many people without vaccines.
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