What could go right in the stock market for 2022? – The Average Joe


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    What could go right in the stock market for 2022?


    December 16, 2021

    stock market

    We’ve talked extensively about what could go wrong with the stock market — here’s a look at what could go right.

    It’s hard not to be optimistic about the future when the S&P 500 keeps plowing to record highs despite pandemics, wars and market bubbles over the past century.

    Think positively: Here are the biggest upside scenarios according to a Bloomberg survey:

    • Economic growth comes in higher than expected (41.5%).
    • Inflation levels fall down (23.6%).
    • COVID issues subsides with no more lockdowns (22.6%).

    Florida’s SBA — the fifth largest pension fund in the US — expects the bull market to go for another few years, but they’re becoming less aggressive with their investments.

    The backbone of the US: Consumer spending — making up nearly 69% of the US economy — is heavily driven by Americans’ willingness to spend.

    November retail sales numbers came in yesterday, lower than expected — 0.3% vs 0.8%. While this is a sign of slowing consumer growth, HSBC investment strategist, Hussain Mehdi, thinks there’s room for positive growth surprises in 2022 (via Bloomberg):

    • Spending could come from households of developed countries — which have large savings built up.
    • Supply shortages — which impacted consumer spending this holiday period — could ease up and lead to higher spending.

    But like we’ve seen in the past few years, be prepared for surprises — and diversify accordingly.

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