US private equity fund Blackstone Group (Blackstone) revealed on Monday (3rd) the “Top Ten Surprise Forecasts” for 2022. U.S. stocks will fluctuate due to interest rate hikes this year, plummeting by nearly 20% first, but will close at flat by the end of the year.
Blackstone’s private wealth division vice chairman Bryon Wien and chief investment strategist Joe Zidle said that corporate profit expectations remain strong, but they cannot withstand the hawkish Federal Reserve (Fed) and the colonization of 10-year U.S. Treasury bonds. The impact of interest rates will climb to 2.75%.
The two estimated that the Fed will raise interest rates four times in 2022.
The two also predicted that inflationary pressures will ease slightly this year, especially for the price inflation of raw materials. However, due to rising wages and rents, the annual growth rate of the Consumer Price Index (CPI) will still reach 4.5%. Under inflationary pressures, the price of gold may rise by 20% this year, reaching a record high, once once more becoming the heart of investors who are chasing safe-haven investors.
The 88-year-old Wayne is the target of many Wall Street analysts. Since 1986, he has published ten surprising predictions. That is, the average investor believes that the probability of occurrence is not more than one-third, but they believe that there is a probability of more than 50%. What happened.
Wayne and Zidle predicted last year that the S&P 500 would fall by 20% in the first half of the year and then return to 4500 points. The actual situation is that the index fell sharply at the beginning of last year (at least 3% in March and May), and at the end of August After rebounding back to 4500 points, the year-end closing was slightly lower than 4800 points, and the biggest retracement of the whole year was only slightly higher than 5%.
The other predictions for the top ten surprises in 2022 are as follows:
- By the end of this year, gatherings and activities are expected to return to their pre-epidemic levels, and people will once once more participate in theaters, concerts and sports events.
- China’s asset management industry will flourish because the government is restricting speculative activities in the housing market, so that Chinese families have more funds to allocate and invest. Western companies have room for development.
- The oil-producing countries have not been able to increase production levels to meet demand.
- Nuclear power generation is attracting attention, improvements in safety measures will reduce concerns, and the feasibility of nuclear power is recognized. At present, the western United States has approved the construction of a major nuclear power facility.
- As the government began to enforce the law, ESG has changed from a corporate statement to a practical policy. For example, the Federal Reserve will use stress tests to understand the ability of financial institutions to face various scenarios of climate change.
- The United States found that the purchased lithium batteries were not enough to meet the demand for scheduled production of electric vehicles, and realized that the lithium, cobalt, and nickel ore markets are all controlled by China, while China tends to retain them for domestic use.