He’s no longer with Nuveen but his predictions continue. High-profile pundit and Crossmark Global Investments CIO Bob Doll is out with his annual look into the proverbial crystal ball.
Last year was tough all around, and that includes on Doll’s predictions, and he’s looking to come back from below-average accuracy in 2021, scoring 6 out of 10 correct, below his long-term average of 7-7.5 out of 10.
This year touches on domestic and international markets, sectors expected to rise, and—of course—politics.
“2022 will likely be more challenging for investors, as the Fed and other central banks progressively unwind accommodative policy in response to the ongoing economic recovery/expansion and elevated inflation readings,” Doll writes. “While economic and earnings growth are likely to be good, a ‘too-high’ inflation backdrop and rising real interest rates suggest less favorable and more volatile conditions for investors than have prevailed since the pandemic lows.”
With this as a backdrop, here is this year’s crop:
1). U.S real growth and inflation remain above-trend but decline from 2021 levels.
2). Inflation falls, but core inflation remains stuck around at around 3%.
3). For the first time since 1958/1959, 10-year Treasuries provide a second consecutive year of negative returns.
4). Stocks experience their first 10% correction since the pandemic and fail to make the gains widely expected.
5). Cyclical, value, and small stocks outperform defensive, growth, and large stocks.
6). Financials and energy outperform utilities and communication services.
7). International stocks outperform the U.S. for only the second year in the last decade.
8). Values-based investing continues to gain [market] share.
9). After a 60-plus year low in 2021, federal interest expense as a percentage of revenue begins a long-term move higher.
10). Republicans gain at least 20-25 House seats and barely win the Senate.
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