Andreas Steno Larsen Macro prediction for 2022 is below. He left Nordea recently and publishes his toughs on Twitter. Highly recommended. I publish his Twitter streak publish yesterday, that exactly reflects out thinking and our market positioning.
First, the Covid crisis is most likely OVER. Omicron is much milder and in Denmark we have <5 Omicron linked ICU cases despite the biggest case count so far (>20.000 daily cases). Since a virus usually mutates in a milder direction, this ought to be very very good
Second, it strikes me how everyone finds that this automatically leads to a strong year for growth. I am not so sure, since it will allow the fiscal cliff to grow, while monetary policy expectations tightened markedly meanwhile. Growth will surprise to the downside this
This also means that the inflation pressures fueled by Corona-lockdowns have peaked and I see more risks to the downside for inflation compared to the current narrative Everybody can suddenly explain why inflation is skyrocketing. Don’t rule out negative CPI prints in Nov/Dec
6-9 months ago, I was also the only one calling for rate hikes from the Fed in 22. Now every analyst finds it oh so natural that the Fed will hike 3-4 times this year. I am tempted to fade these expectations now, since inflation looks peakish, while growth is coming down.
This means that I like to be long USD, long duration (the longer the better) and long growth/tech stocks in to 2022. It might also be a good idea to remove a few chips from the commodity/crypto space consequently.
The credit impulse is waning swiftly now, and the above is basically your playbook when that happens. Happy hunting in 2022! It is good to be back 🙂
The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.