JPMorgan ser positivt på markedsudviklingen i 2022 trods den højere inflation. JPMorgan hæfter sig ved, at virksomhedernes indtjening har været meget høj i år, og højere indtjening vil historisk altid føre til højere investeringer et år senere, og dermed vil produktiviteten og produktionen stige. Det vil have en gavnlig virkning på aktierne.
Thought of the week
Inflationary concerns have been further exacerbated by the October CPI report, which showed headline consumer prices increased 6.2% y/y – the fastest growth in prices since 1990.
However, economic data released early last week suggests that some of these inflationary pressures may begin to ease next year.
As shown in this week’s chart, there has historically been a tight relationship between profit growth and investment spending (CAPEX) a year later; since the start of the year, we have seen strong profit growth as the economy recovered from COVID-19, with S&P 500 EPS growing 143% y/y in 1Q21, 94% in 2Q21 and currently tracking a 38% y/y increase in 3Q21.
1Q21 was the first quarter of positive earnings growth since the start of 2020, suggesting that capital expenditures should accelerate into 2022 and potentially lead to increases in productivity and output. This thesis was further supported by the jump in industrial and manufacturing production during the month of October.
Although the Fed estimated that about half of the gain was a recovery from the effects of Hurricane Ida, non-vehicle production was still solid, suggesting that business investment is beginning to accelerate.
This aligns with management commentary during 3Q21 earnings calls, which suggested margin pressure may begin to fade in 2H22 as investment in production allows for a subsequent improvement in productivity.