Below, we try to make predictions of the financial markets: what will be the trend of the stock exchanges
Let’s try to understand it, helping us with what the best analysts of Wall Street say, that is the most important stock exchange in the world, which often also determines the trend of all the others, always remembering that there are no 100% accurate predictions and that no one has the crystal ball to predict the future and that these predictions could prove to be fallacious.
Recalling as usual that NO ONE KNOWS THE FUTURE and that every forecast on the markets must be taken with due caution, let’s try to understand – based on the data available to us today and thanks to a summary of what the most authoritative analysts on Wall Street say – what could be the trends of 2021, i.e. if there will be a bear / bear market or a bull / bull market.
What will happen in 2022
This could be the year of economic revival in Italy. After years of near-zero growth, the pandemic arrived in 2020 with a GDP that dropped by more than 10 percentage points. 2021 is closing with a + 6% but it is only a rebound, now the difficult thing is to try to ride this rebound and make it become stable growth, which will hardly be 6% but could be close to it.
As we have said several times, the PNNR revival plan could succeed in realizing this great need which for Italian citizens should translate into thousands of new jobs.
This is what Italy is missing: so many people who work, who create wealth for themselves, for their families, their businesses and for the whole community.
In all this, the investor will have to pay attention to the companies that will benefit most from this growth, first of all those committed to working for PNNR funds.
What will happen in the US in 2022
• As we enter 2022, some of the main market sectors to keep an eye on are oil, gold, automobiles, services and housing.
• Other key areas of concern include tapering, interest rates, inflation, payment-by-order flow (PFOF), and antitrust.
• Expect ongoing political battles over federal spending and the debt ceiling, climate change and student debt.
• The new head of the Consumer Financial Protection Bureau (CFPB) and possibly a new Federal Reserve chairman could reshape the policy.
• President Biden’s nominees will form a majority on the Federal Reserve Board (FRB).
• Labor market issues, including the impact of mandates on COVID-19 vaccines, should also be at the forefront.
• The new global minimum corporate tax rate will begin to take shape, impacting multinationals.
Market sectors
The price of crude , as measured by the West Texas Intermediate ( WTI ), has risen about 80% from the beginning of 2021 to the beginning of November. The increase can be attributed in part to the economic recovery from the pandemic and in part to increasing supply restrictions, as the Biden administration implements an anti-oil agenda that restricts oil exploration and production in the United States, a trend that is likely to continue into 2022.
Inflation is on the rise, with the full version of the Consumer Price Index for All Urban Consumers (CPI-U) recording a 6.2% increase in the 12 months to October 2021, compared to 5, 4% for the 12 months to September 2021. This was the largest 12-month increase since the period ending November 1990. Gold reached a recent peak of over $ 2,000 per troy ounce in August 2020, but it is has been trading in a range of around $ 1,800 since mid-2021. 3 Expectations about future inflation rates are likely to drive gold price fluctuations in 2022. See also: How to invest with inflation –
Used cars have been a thriving market, in part due to bottlenecks in semiconductor chip supply that have limited the production of new cars. Posting high prices for both new and used cars, as well as for car rentals, are likely to persist into 2023.
The service sector, particularly travel, tourism and hospitality, has had particularly long-lasting negative impacts from COVID-19. It is unclear whether a strong trend reversal can be expected in 2022.
Sales of new homes rose, even as the average price hit a new record in September 2021. According to a research note, “A combination of lower rates, easier lending standards and, perhaps, a renewed bout of fear. COVID in the cities, has led the turning point ». It remains to be seen how long these trends will persist into the remainder of 2021 and 2022.
Federal Reserve Policy and Regulations
The US Securities and Exchange Commission (SEC) has considered a total ban on payment for order flow (PFOF), as SEC Chairman Gary Gensler sees “an inherent conflict of interest.” PFOF became a hot topic in 2021 primarily in relation to Robinhood Markets, Inc. (HOOD). If the SEC tightens the practice in 2022, it will disrupt the business models of brokerage firms like Robinhood and perhaps dampen the recent surge in active trading and speculation by retail investors.
Federal Reserve Board (FRB) Chairman Jerome Powell announced that, starting in December 2021, the Federal Open Market Committee (FOMC) will begin reducing net new bond purchases from $ 120 billion per month to an eventual target of $ 120 billion per month. zero by mid-2022. Powell insisted that despite the tapering, the Fed’s stance will remain “dovish”, still trying to keep interest rates close to zero. Indeed, even after tapering, the Fed will continue to have a bond portfolio worth approximately $ 8.5 trillion, roughly double its pre-pandemic value and nearly ten times its value in mid-2007. , the initial reaction of the equity and bond markets was attenuated.
The Federal Reserve System has been exploring policy responses to the rise of cryptocurrencies and digital currencies. Federal Reserve Chairman Jerome Powell has publicly acknowledged that the Fed is actively considering whether to create a central bank digital currency (CBDC). Before taking this step, the Fed will seek the views of many key voters. “It is important to do it right, rather than quickly,” Fed Chairman Powell said, noting that such an initiative would only be undertaken with broad support from both Congress and the executive branch of the federal government.
The Biden administration has reportedly assembled the most aggressive antitrust team in decades, with likely targets ranging from the tech industry to pharmaceuticals, agriculture, healthcare and finance, among others. Biden also issued an executive order that includes 72 initiatives aimed at increasing competition in numerous industries, increasing merger control and limiting employers’ ability to coerce employees into non-compete agreements. Even before Biden took office, the world’s largest company by market capitalization, Apple Inc. ( AAPL ), publicly indicated that potential antitrust action has become a serious business risk.
Law
With federal spending and the federal budget deficit still close to all-time highs and the Biden administration pushing for expensive infrastructure bills to pass, the federal debt ceiling has become a new topic of discussion in Congress. A possible federal government shutdown and default was temporarily averted in October 2021, but these problems are likely to persist into 2022, creating continued uncertainty for markets and the economy.
President Biden’s “Roadmap to Building a Climate Resilient Economy” is a sweeping executive order that includes a wide range of climate change initiatives involving many federal agencies and departments. Federal budget processes and procurement standards are affected, as well as public company communications, investment criteria, and lending standards. Published on October 14, 2021, its impacts are likely to be felt more and more as 2022 progresses.
Student debt in the United States, which now exceeds $ 1.7 trillion, has become a growing political problem. During his campaign, President Biden advocated for the cancellation of student debt of up to $ 10,000 for all borrowers, and some proponents of student debt relief argue that he has the legal authority to cancel all federally owned student debt. Meanwhile, opponents of a general cancellation argue that the main beneficiaries would be borrowers in high-paying professions. 15 Furthermore, cancellation would allow, instead of holding back, a continuous upward spiral in the cost of higher education.