Året 2022 bliver præget af en kamp mellem positive og negative tendenser. Generelt er der udsigt til et moderat afkast på aktier, skriver Morgan Stanley, men banken ser også mulighed for, at nogle få selskaber bryder igennem og skaber gode gevinster.
Stock Market 2022: A Battle between Positves and Negatives
The balance of corporate fundamentals against a less accommodative U.S. Federal Reserve could create modest equity returns, with opportunities for generating alpha.
In an already volatile year for stocks, what may lie ahead for the rest of 2022? Market activity that has transpired year-to-date could be a microcosm of what’s to come: A close battle between the positives and negatives.
At this stage of an economic recovery, it is not that unusual for the U.S. Federal Reserve to begin shifting policy and reducing liquidity. Tightening financial conditions weigh on equities, especially the more speculative stocks. However, the fourth quarter earnings reports for corporate America held good news overall.
Clearly the earnings misses get the headlines, nevertheless, consensus earnings estimates for the S&P 500 for 2021, 2022 and 2023 are higher today than they were at the end of 2021.1 Overall, corporate America is healthier than Wall Street has expected. Throw in the resumption of strong company stock buybacks, and there is your good news for stocks.
The clash between tightening financial conditions and good news from corporate America’s earnings results could characterize most of the year, which is not unusual for the third year of an economic recovery. Investors shouldn’t let the bears scare them out of taking advantage of selloffs, but they also shouldn’t chase gains when there’s a lot of market strength. In the end, 2022 could be an OK year for the market return overall, just not as strong as what we’ve seen in the last few years.
Areas of Opportunity
Despite lower returns, 2022 should offer more opportunities for tactical alpha generation at the allocation level. Drilling down into areas of the market, here are opportunities we see:
- U.S. Value Stocks: We remain committed to a value bias in the U.S. for two reasons. The first is that in recessions, value stocks have tended to get very cheap. After recessions, they tend to trade back to a normalized level. They are not at that level yet. The second is that we think the economy could be moving into a period of permanent higher inflation and if it does, inflation-sensitive stocks, which reside in the value bucket, could outperform for an extended period.
- Growth/Technology Stocks: We are less negative on growth than we have been, given the magnitude of recent underperformance vs. the broad market. In many ways, the chase into growth/technology stocks after the COVID-19 lows reminded us of the NASDAQ bubble of 2000. We thought that once the bubble burst, it was going to be ugly, which it has been. However, the more established mega-cap technology stocks never traded to the same frenzied level—that is how the environment today is different than in 2000. Recent underperformance despite numerous impressive earnings reports means many of these large-cap growth names are now trading at very reasonable valuations.
- Europe: We regularly hear calls from strategists that this will finally be the year to favor Europe over the U.S. It is true that European stocks are cheaper and have more of a value bias, and we see opportunities in some European stocks this year. But I question any widespread jettisoning of superior-performing stocks of U.S. companies for European ones, just because they are cheaper.
- Asia ex-Japan: This is the region of the world that has seen companies compound at rates competitive with great U.S. companies. While the region woefully lagged in 2021, we continue to believe this is a better allocation for non-U.S. assets than in Europe.
