December 13, 2021
Marcus is excited to share this insight from our colleagues at Goldman Sachs Asset Management’s Strategic Advisory Solutions, highlighting some of the latest issues and trends in the financial markets. You can also read the original version of this article here.
If you’re wondering what the markets may have in store for 2022, you’ve come to the right place. Here are five things to know.
Steady as she goes – economic growth is still on deck. Although the fastest pace of recovery is behind us, global GDP is likely to grow by ~4.5% in 2022.
Growth in the first half of 2022 is expected to be stronger – thanks to economic reopening, pent-up consumption and inventory rebuilding.
Inflation, the house guest who won’t leave. While rising prices have been the talk of the town, Goldman Sachs Asset Management (GS) is confident that inflation will ease in 2022. Still, don’t expect price pressures to go away quickly. Even though there are some hopeful signs of relief, persistent pressures in housing, wages and commodities might require action from central banks.
Hey, central banks – you do you. After two years of moving in lockstep when it comes to monetary policy, central banks in developed markets (DM) are ready to do their own thing. In other words, monetary tightening policies from DM central banks will be more regionally tailored.
Case in point: The Federal Reserve is expected to begin hiking interest rates in mid-2022, while New Zealand, Canada and the UK will have already begun their hikes by then. Australia’s central bank and the European Central Bank aren’t expected to make moves until the fourth quarter of 2023 and third quarter of 2024, respectively.
Slide into this DM and let’s talk stocks. Developed markets will likely move higher in 2022, as economic conditions remain supportive and investors continue to put money in markets that are expected to have attractive relative returns.
In the longer term, GS is expecting a flatter market (translation: lower aggregate returns and a wider range of volatility), with competitive returns globally.
No love actually for commodities…if you’re a buyer. The commodity markets have seen better days. The challenges are structural and stem from years of under-investment. Unlike supply bottleneck issues elsewhere, the capital investment problems in commodity markets won’t be fixed overnight, especially given the potential headwinds from longer-term environmental and social policies.
2021 was a year of economic recovery and expansion. Amid this backdrop there were packed ports, meme mania and a near-record number of S&P 500 highs.
Many of the macro and market events may be hard to believe, or easily forgotten, in the stream of headlines. So before we settle into 2022, let’s see how much you remember from 2021 with this short quiz.
Even if you don’t get every single question right, you’ll pick up enough market trivia to help you drop some knowledge at your next dinner party.
This article is for informational purposes only and shall not constitute an offer, solicitation, or recommendation to buy or sell securities, or of an account type, securities transaction, or investment strategy. This article was prepared by and approved by Marcus by Goldman Sachs®, but is not a description of any of the products or services offered by and does not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Goldman Sachs Bank USA and Goldman Sachs & Co. LLC are not providing any financial, economic, legal, accounting, tax or other recommendation in this article and it is not a substitute for individualized professional advice. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA, Goldman Sachs & Co. LLC are or any of their affiliates, none of which are a fiduciary with respect to any person or plan by reason of providing the material or content herein. Neither Goldman Sachs Bank USA, Goldman Sachs & Co. LLC nor any of their affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.
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