Udsigten for 2022 er fyldt med usikkerhed, skriver Natixis. Glem alt om standard-prognoserne om en kursstigning på mellem 5 og 7 pct. Sådan siger analytikerne altid efter et godt år. Det kommer til at gå helt anderledes efter året, der toppede alt med en kursstigning på 20 pct. Natixis tror på to-cifrede vækstrater for aktierne. Banken hæfter sig ved, at virksomhedernes indtjening er bedre end ventet. De har håndteret coronaen og flaskehalsproblemer rimelig godt, og forbrugerne har en enorm opsparing, der kan omsættes i et højt forbrug. Derfor er der udsigt til en relativ høj vækstrate i økonomien – snarere over 7 pct. Banker tror, at amerikanske aktier vil være de bedste i det nye år.
With global equity markets on track to post a 20% return in the year of “Peak Everything,” many market participants are predictably ratcheting back their return expectations for 2022. That’s right, it’s “Cautiously Optimistic” season and strategists up and down the street are rolling out their typical 5%–7% return forecasts – the average annual return that everyone always expects yet never seems to arrive year after year. You won’t hear those sentiments from us.
To be sure, 2022 looks to be full of uncertainty and shifts as the global economy continues to normalize from the initial Covid shock nearly two years ago. However, growth appears set to remain robust and could keep powering markets up that ever-growing Wall of Worry.
Wider Plateau of Elevated Growth
Let’s start with the growth backdrop. The defining characteristic of the recovery has been a persistent underappreciation of economic and earnings growth. Quarter after quarter, some of the largest and most heavily followed companies have shattered expectations while economic growth surprised to the upside. Even as investors braced for a disappointing 3Q21 earnings season, name after name cited managing rising cost pressures and supply chain disruptions that were more than offset by robust top-line growth. We didn’t witness the dreaded margin compression investors broadly feared.
With those strong earnings came strong guidance and a growing sense of peak supply chain disruptions. We expect more of the same in the year ahead as investors underestimate the operating leverage gains achieved during the pandemic through cost management and optimization.
We stressed throughout 2021 that growth was unlikely to rapidly revert to pre-crisis trend levels. Supply chain bottlenecks and labor supply shortages all but assured the growth peak in 2021 would be lower than what we otherwise might have enjoyed. But that growth was likely pushed into 2022. So we are trading a lower peak for a wider plateau of elevated growth. Also, lost within the raging inflation debate is the fact that robust demand is bleeding into price gains. We think this is muddying the picture of true economic growth.
While we would all prefer modest inflation and higher real growth, the nominal growth picture remains robust. We think consensus estimates of 7% nominal gross domestic product (GDP) growth are likely still too low. Continued normalization of consumption patterns from goods back towards services should help shift the composition of nominal growth away from inflation and back towards real growth. Also, corporates’ book revenues in nominal terms, and well above trend growth, should continue to support the corporate earnings engine.
Catalysts for Growth
While many investors continue to fear the fiscal cliff, the effects of the fiscal impulse will continue to be felt in 2022 as the growth engine shifts from the public to the private sector. Consumer balance sheets have never been stronger, with over $2.7T in excess savings built up through the crisis and plenty of room to re-lever. Corporations are equally flush with cash and looking for ways to deploy that capital as companies signal intentions to increase capital expenditures (CapEx).1 Many firms are already doing just that. In both instances, much of that cash makes its way either to the bottom line through spending or into multiple expansion as savings and corporate buybacks. This should be a win-win for equity markets.
Much maligned supply chain disruptions have continued to weigh on inventory levels which will need to be rebuilt, providing a further tailwind to growth. And a robust housing market that is likely to remain strong into 2022 – being supported by the Millennial demographic bulge – should serve as yet another upside catalyst for growth. Putting these forces together, it’s not hard to envision another year of strong economic growth supporting further earnings growth and multiple expansion. After all, while we constantly hear that valuations are extended, equities look cheap amidst that backdrop, particularly when compared to fixed income valuations and deeply negative real rates.
Favorability of US Equities
So how does one position for this backdrop in 2022? Much the same as is currently appropriate. We favor equities, more specifically US over international, and barbelling between tech and cyclical sectors. After what felt like an endless consolidation through much of 2021, small-caps could benefit from a year-end rally into early 2022. That said, any allocation there should likely be viewed as a short-term rental. Tech should continue to be supported by a healthy consumer. Cyclical components, such as semiconductors, we think should benefit from the emerging CapEx cycle. The broader cyclical complex, including industrials, materials, financials, and energy, could continue to post upside surprises as nominal growth delivers upside beats, as well.
Resynchronization of Global Growth
While there’s no shortage of topics to worry about in 2022 – including inflation, policy tightening, new variants, and stretched valuations – the catalysts to scale the Wall of Worry continue to build. For example, policy and financial conditions appear to be accommodative for some time. Combine that with the private sector driving robust growth to deliver earnings upside and valuation support, and it’s not hard to imagine another year of double-digit equity market gains ahead, which could broaden as 2022 progresses. Not your typical 5%–7% year after all?