Here are five major predictions for 2022
It’s time to make my best guesses for next year: 2022 is a year to go big and bold, because a boom is ahead. Not a boom in everything, but definitely a lot. Some good, some not so good.
Let’s talk about the booms to come.
Friendly reminder: don’t be a hero and take these predictions as investment advice. They are not. They are made for fun and to get you thinking. You can tell me if they’re wrong at the end of the year.
Having said that, I have basically gone 5 to 5 on my predictions this year. One could procrastinate on the “Roaring 20s” prediction, given omicron, but there is no indication that the economy is slowing, so I will consider this a victory. As of this writing, ETF Invesco DB Commodity Index Tracking and medical device company DexCom, which I referred to in my forecast, have both increased by over 40% since the start of the year. . That’s more than the ETF Invesco QQQ, which gained 28%, and the S&P 500, up 27% in 2021.
Traders work on the floor of the New York Stock Exchange (NYSE) on December 02, 2021 in New York City.
Spencer Platt | Getty Images
Now it’s time for 2022 and the booms to come.
1. Price boom
Prediction: CPI exceeds 4% on average all year round
Inflation will get worse before it gets better. Salaries are rising (that’s good!) But costs are likely to rise even more (that’s bad). House prices and rents are still too high. Car prices stay in the stratosphere. Energy costs will increase this winter. Want to eat? Not only are food prices rising – or packaging getting smaller – but Record fertilizer prices now could push food prices even higher next year. Also, no, the shipping and port situation is hardly any better, despite what you can hear. On the contrary, the ships just move more offshore. And sorry, Federal Reserve Chairman Jay Powell, unless you learn how to grow or unload containers, a few interest rate hikes won’t matter much in the short term. Assuming the government doesn’t change the inflation metrics on us (hey, it’s an election year after all), we should end 2022 with a consumer price index gain of more than 4%.
Prediction: registering births in the United States
I love this prediction. I so want this to be correct. The pandemic and the lockdowns have taken their toll. On lives, families and our collective psyches. But we’re getting out of it, because people are going to do what people are doing: moving forward. It doesn’t matter what happens with Covid. Singles mingle. Travel is booming. Love is in the air. Even hip millennials buy big homes in sleepy suburbs. Houses with additional bedrooms. Wink wink. The “children” are all tests. Not for the Covid, but for the children. The pandemic has brought the family back to the center of concern. This is a good thing. Birth rates in the United States have been decline forever. That should change next year. Is there a child-focused ETF? There should be. Consider doing long baby stuff and anything birth-related like already searing Progyny actions.
Prediction: Nikkei 225 tops S&P 500
Japan is a booming country. Sounds strange, doesn’t it? Of course, Japan has a stagnant economy. Has been for years. Numerous recessions in recent decades. And hey, Japan is so badly in need of a baby boom that the government has come up with policies to encourage the creation of a family. But from a business perspective, Japan has done it. Valuations of Nikkei companies are well below those of the S&P 500, even as earnings rise. Oh, and Japan’s tax policy is as simple as ours. Jefferies analysts see value in many Japanese companies like Sony, Toyota, Suzuki, Subaru, Denso and others. Result: the iShares MSCI Japan ETF EWJ outperforms the S&P 500 in 2022.
Prediction: sales of electric vehicles exceed 10% of the automotive market
Hope finally meets the hype. Electric vehicles (EVs) are still a tiny bit in the US auto market. They represent around 4% of passenger car sales, according to BloombergNEF. They are hampered by high prices and concerns about battery life. This changes in 2022. The number of electric models available will double to around 20. This is still only a fraction of the roughly 300 models available in total, but significant for two reasons. First, you no longer need to be a Bitcoin billionaire to afford an EV. Then we get what Americans really want: trucks and SUVs. Between the Ford F-150 Lightning and the Rivian R1T (Motor trend Truck of the Year for 2022), as well as so-called mid-size ‘cute utility’ like the Volkswagen ID.4, there are the options that American families want (especially if we get the aforementioned baby boomer) . The prices are also falling.
Perhaps the biggest sales hurdle outside of cost – the availability of charging stations – is also being addressed nationally. As I discovered on a 517 mile road trip in an all-electric Polestar in August, range anxiety is a real thing. But as more charging stations are built and drivers can see that they won’t have to worry about where to charge when they’re not at home, it will be a cycle. positive bullish which will increase sales.
Prediction: copper and palladium look like gold
Want to build an EV? You need copper. Charging station? The copper. A giant battery to store renewable energy? You guessed it, copper. The average electric car uses over 150 pounds of copper. Now multiply that by millions of cars, batteries, power lines and whatever else we want to build on the grid. It is a lot of metal that must be extracted from the ground. The world’s largest copper mining country, Chile, has just elected a new president who sound like he doesn’t like to mine copper. Freeport McMoRan must be in mining heaven. Meanwhile, palladium has been a dog of a metal this year, but that can change. Palladium is primarily considered to be used in gas guzzling cars, but it is now being tested in new battery technologies. It all sounds like a recipe for increased demand over little increased supply. Bullish.
Special Bonus Prediction: The 10-year Treasury yield ends in 2022 below 1.75%. Timestamp that!
Happy New Year and on the way to a healthy, happy and pandemic end of 2022.