Tuesday, December 7, 2021
The entire team at LPL Research is so excited to announce the release of Outlook 2022: Passing the Baton. It is hard to put into words the amount of time and cross department organization it takes to get something like this off the ground, but we think you’ll love the final product.
From the actual Outlook, to an interactive look at the Outlook, to special webinars, to videos, to podcasts, to social media, to a Power Point presentation, there are so many ways that our nearly 20,000 Advisors can leverage and share Outlook 2022. (Please note, some of the mentioned ways to leverage Outlook 2022 are only for our LPL Advisors, not for public consumption.)
“The U.S. economy bounced back from its worst year since the Great Depression in 2020 with one of the best years of growth in nearly 40 years in 2021”, said LPL Chief Market Strategist Ryan Detrick. “A combination of record stimulus, a healthy consumer, an accommodative Fed, vaccinations, and reopening of businesses all contributed to the big year. In 2022, the economy may be ready for a handoff, back to a greater emphasis on the individual choices of households and businesses.”
What do we see happening? Here’s a quick summary of the highlights.
- Economy: As the U.S. economy moves more to mid-cycle, LPL strategists forecast 4.0 to 4.5 percent gross domestic product (GDP) growth in 2022. Fiscal and monetary policies played big roles in the economic recovery in 2021, but LPL’s strategists see 2022 playing out as a handoff—with consumers, productivity, small businesses and capital investments all playing a part in the next stage of economic growth.
- Stocks: Expect solid economic and earnings growth in 2022 to help stocks deliver additional gains next year. LPL strategists believe the S&P 500 could be fairly valued at 5,000 to 5,100 at the end of 2022. Additionally, they favor U.S. over developed international, value over growth early in the year, and cyclical sectors over defensives.
- Bonds: Expect interest rates to move modestly higher in 2022 based on near-term inflation expectations above historical trends and improving growth expectations once the impact of the COVID-19 Delta and Omicron variants recede. The 2022 forecast for the 10-year Treasury yield is 1.75 to 2.00 percent.
We hope you enjoy Outlook 2022 and here’s to a great year next year, filled with good health, good times, and a continuation of the bull market!
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
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All index and market data from FactSet and MarketWatch.
This Research material was prepared by LPL Financial, LLC.
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