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Some investors worry that interest rate-sensitive growth and technology stocks would be particularly vulnerable should the Fed aggressively tighten its monetary policy through rate hikes. The S&P 500 index, which has a large exposure to tech, is on track for a third straight year of strong gains after rising almost 25% in 2021 through Tuesday, according to FactSet. “Our view is that 2022 will be the year of a full global recovery, quantitative trading systems an end of the global pandemic, and a return to normal conditions we had prior to the COVID-19 outbreak,” Marko Kolanovic, chief global markets strategist at JPMorgan, and the bank’s global co-head of research Hussein Malik wrote in the report Wednesday. The recent spike in market volatility may herald a bumpier U.S. stock market in 2022, as investors come to grips with an inflection point in monetary policy in the pandemic.
“Omicron throws in a bit of a wrench” to the 2022 outlook, he said of the new variant of the coronavirus, though investors have appeared encouraged by some early signs that it may be less dangerous than initially feared. Any investment or investment activity to which this communication relates is only available to relevant persons and will be engaged in only with relevant persons, or in the EEA, with Qualified Investors. Any person who is not a relevant person, a Qualified Investor or otherwise permitted under applicable law or regulation to access the information, should not act or rely on the information contained herein. The U.S. stock market will probably deliver more modest gains “accompanied by higher volatility” next year, Jeffrey Kleintop, chief global investment strategist at Charles Schwab, told MarketWatch by phone.
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- “There probably will be some elevated volatility around the potential tightening of Fed policy,” said Shawn Snyder, head of investment strategy at Citigroup’s U.S. consumer wealth management division, in a phone interview.
- “Within the U.S., we like reopening and reflationary themes and beneficiaries of higher bond yields,” JPMorgan said in its report Wednesday.
- Wall Street banks have been rolling out their 2022 forecasts for the S&P 500, with Goldman Sachs Group and JPMorgan being among the most bullish on U.S. stocks.
- We endeavor to keep your personal information secure with appropriate level of security and keep for as long as we need it for legitimate business or legal reasons.
- The recent spike in market volatility may herald a bumpier U.S. stock market in 2022, as investors come to grips with an inflection point in monetary policy in the pandemic.
Bank of America’s analysts have a lower price target than Barclays for the S&P 500 next year, with a BofA Global Research report last month showing the benchmark will end 2022 at 4,600. The CBOE Volatility Index or VIX, jumped in late November and remains above its 200-day moving average even after subsiding since last week, according to FactSet data. The VIX broke above 30 last week for the first time since the first quarter of 2021, the data show, amid market jitters over the emergence of omicron and the potential move by the Federal Reserve to remove some accommodation from the market faster than investors had anticipated. You acknowledge that no registration or approval has been obtained and Eni Gas e Luce S.p.A. società benefit and its affiliates assume no responsibility if there is a violation of applicable law and regulation by any person. In Morgan Stanley’s view, “this suggests investors should move toward stock picking and away from passive index funds,” her note shows.
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Goldman expects the S&P 500 will end 2022 at 5,100, according to a portfolio strategy research report from the bank dated Dec. 3. Meanwhile, JPMorgan analysts predicted in a research report at the end of November that the U.S. stock benchmark will rise next year to 5,050, partly on “robust earnings growth” and easing supply chain woes. RBC Capital Markets has forecast the same price target as JPMorgan, while Deutsche Bank predicts the S&P 500 will end next year at 5,000, according to a slide presentation from its chief investment office. “That’s a big transition that creates tension for investors,” said Lauren Goodwin, economist and director of portfolio strategy at New York Life Investment, in a phone interview. The Fed looks to be positioning for more flexibility for potential interest rate hikes next year, with increased inflationary pressure likely to mean more rate rises in 2022 than currently expected, creating more market risk, she said. “There probably will be some elevated volatility around the potential tightening of Fed policy,” said Shawn Snyder, head of investment strategy at Citigroup’s U.S. consumer wealth management division, in a phone interview.
You acknowledge that the access to information and documents contained on this portion of the website may be illegal in certain jurisdictions, and only certain categories of persons may be authorized to access this portion of the website. If you are not authorized to access the information and document contained on this portion of the website or you are not sure that you are permitted to view these materials, you should leave this portion of envelope channel indicator the website. Meanwhile, Citigroup set an S&P 500 target of 4,900 for the end of 2022, a research report from the bank in late October shows. Coming in below that level, Barclays predicted in a U.S. equity strategy report this month that the index will finish next year at 4,800. We endeavor to keep your personal information secure with appropriate level of security and keep for as long as we need it for legitimate business or legal reasons.
Citi’s Snyder told MarketWatch that during “midcycle” he likes high-quality stocks, “dividend-growers” and global healthcare equities. Consistent earnings growth and “reasonable valuations” make healthcare attractive, he said, and stock bets in the area can serve as “a volatility dampener” in portfolios. “The reason for this is our expectation for increasing interest rates and marginally tighter monetary policy that should be a headwind for high-multiple markets such as the Nasdaq,” the JPMorgan strategists wrote, citing the tech-laden Nasdaq Composite Index.
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You acknowledge that the materials on this website that you are accessing are confidential and intended only for you and you agree you will not forward, reproduce, copy, download or publish any of such materials to any other person if this is not in accordance with the law. While the Fed may become more aggressive in tapering its bond purchases, potentially completing the process in March instead of June, said Puri, he expects the Fed will still be “dovish” on rates next year. Puri forecasts that the Fed will raise rates just once next year, which is below consensus, he said. Immunology best forex trading tools is one of three megatrends poised to accelerate next year as “a range of next-gen oncological therapeutics come up for approval and enable more targeted cancer treatment,” according to Jeff Spiegel, head of U.S. iShares megatrend and international ETFs. Shares of the iShares Genomics Immunology and Healthcare ETF were up about 0.2% this year based on midday trading Wednesday, FactSet data show, at last check. JPMorgan expects that “international equities, emerging markets and cyclical market segments will significantly outperform,” according to its report Wednesday.
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The bank’s strategists expect the yield on the 10-year Treasury note will rise to 2.25% by the end of next year, the report shows. “Most of the equity upside should be realized between now” and the first half of 2022, “when monetary and fiscal policy tailwinds will be strongest,” JPMorgan Chase & Co. strategists said in a 2022 outlook report Wednesday. Goodwin said she also expects increased volatility, amid transitions that include the fading of the fiscal stimulus that provided direct support to consumers during the COVID-19 crisis and the Fed taking its “foot off the gas” in the economic recovery. She expects “much lower” stock-market returns next year compared to gains so far in 2021.
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I agree to be bound by its terms and I am permitted under applicable law and regulations to proceed to the following parts of this website. Wall Street banks have been rolling out their 2022 forecasts for the S&P 500, with Goldman Sachs Group and JPMorgan being among the most bullish on U.S. stocks. If I am a resident of, or located in, the United Kingdom, I am a Qualified Investor and a relevant person.
Two other megatrends to watch in 2022 are “digital transformation” intensifying through the cloud, 5G and cybersecurity, and “automation technologies” such as robotics and artificial intelligence, Spiegel wrote in a report this month. Automation technologies should grow “in response to ongoing supply chain bottlenecks and wage inflation” in the pandemic, he wrote. The core of Morgan Stanley’s “cautious” view on the S&P 500 is based on price-to-earnings ratios typically compressing during “a midcycle transition,” Shalett said. “Within the U.S., we like reopening and reflationary themes and beneficiaries of higher bond yields,” JPMorgan said in its report Wednesday.