Markets and Economic Update: 2021 Review and 2022 Outlook

David Lundgren, CFA®
January 11, 2022

This special report from the Hancock Whitney Asset Management Leadership Team provides our perspectives about 2021 and what could be in store for the markets and economy in the year ahead. 

 

Markets and Economic Update 2021 Review and 2022 Outlook

 

Investors faced many challenges in 2021

Although 2021 was better than 2020 in many respects, investors still had many challenges to withstand: Political chaos following a contentious election, new COVID variants and pandemic surges, China and Russia flexing, proposals for higher taxes, supply chain issues, and higher inflation were all areas of concern during the year. Yet through it all, stock markets advanced and most investors with well diversified portfolios chalked up another win towards reaching their goals.

 

Key Investment Themes for 2022

Here are some themes that we believe are likely to be important market considerations in 2022:

Economy 

  • U.S. economic growth slows into 3-4% range
  • Americans get back to work as the U.S. approaches full employment
  • Strong capital spending on innovation and productivity provides lift for growth
  • Supply chain frictions likely to ease
  • Greater efficiency and lower goods prices lead to lower inflation

Stocks

  • Sales and profit growth rates continue to decelerate
  • Exogenous risks will add to uncertainty and volatility
  • Improved corporate balance sheets reduce risk factors
  • Stocks likely to produce average returns with greater volatility

Federal Reserve and Interest Rates

  • Federal Reserve begins to raise short term rates in summer
  • A shrinking Fed balance sheet will likely result in higher short-term interest rates
  • Long-term interest rates are likely to migrate higher

Government Policy

  • Mid-term elections begin to dominate policy discussions
  • Some version of the Build Back Better legislation could likely pass in 2022
  • International trade relations will be tested
  • Globalism and energy policy debates heat up
  • Stronger labor force participation essential to growth sustainability and prosperity

 

For an in-depth and detailed look at these themes and more, we invite you to download our 2021 Year in Review and Outlook for 2022 report.  

 

Read the Report

 

Talk with a trusted professional

While much progress was made in 2021, markets clearly still have many hurdles to overcome in 2022. This environment can be volatile and stressful for many in the short term, but the key to successful investing is to stay disciplined in your approach. 

Working with a trusted financial professional may be one of the most important steps to help prepare for unexpected events. At Hancock Whitney, we’re pleased to offer complimentary* financial planning and reviews that can help you plan for and recover from unexpected events — and keep you on the path to reaching your financial goals faster. Talk with a financial advisor today.

*While the financial plan is free, there will be fees/commissions associated with any investment or insurance products used to implement the plan.

 

See and hear this month's presentation by clicking on the play arrow below:

HubSpot Video

 

 

The information, views, opinions, and positions expressed by the author(s), presenter(s) and/or presented in the article are those of the author or individual who made the statement and do not necessarily reflect the policies, views, opinions, and positions of Hancock Whitney Bank or Hancock Whitney Investment Services, Inc. Hancock Whitney makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented. This information is general in nature and is provided for educational purposes only. Information provided and statements made should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Hancock Whitney Bank and Hancock Whitney Investment Services, Inc. encourage you to consult a professional for advice applicable to your specific situation.

Investment and Insurance Products:

NO BANK GUARANTEE NOT A DEPOSIT MAY LOSE VALUE NOT FDIC INSURED
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY